Module 4 Flashcards

1
Q

What is intercept value on the regression output.

A

Y is a value when X is zero.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Regression analysis

A

seperates costs in to fixed and variable components

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Absorption Approach equation

A

revenues less COGS = Gross Margin Less Operating Expenses = Net income

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Contribution Approach Equation

A

revenue less variable costs = contribution margin less fixed costs = net income

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Contribution margin ratio

A

contribution margin/revenue

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Treatment of Fixed MOH with Absorption vs Variable Costing

A

Included in product cost with absorption and excluded from product cost with variable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Breakeven points in units

A

total fixed costs/contribution margin per unit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Breakeven point in dollars 1) Contribution margin per unit

A

unit price x breakeven points in units

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Breakeven point in dollars 2)Contribution Margin ratio

A

Total fixed costs/contribution margin ratio

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Margin of safety

A

excess sales over breakeven sales, expressed in dollar or as a %.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Margin of safety (in dollars)

A

Total sales (in dollars) - Breakeven sales (in dollars)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Margin of safety percentage

A

Margin of safety in dollars/ Total Sales

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Coefficient of correlation (r)

A

measures strength of linear relationship between the dependent variable and independent variable. between -1 and 1

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Coefficient of Determination (r squared)

A

proportion of dependent variable explained by the independent variable. Value between 0 and 1

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What happens to ratio when numerator increases

A

resulting ratio increases

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What happens to ratio when denominator increases

A

resulting ratio decreases

17
Q

Operating cash flow ratio

A

cash flow from operations/ending current liabilities

18
Q

Working capital turnover

A

Sales/Average working capital

19
Q

Total debt ratio

A

total liabilities/total assets

20
Q

Times interest earned ratio

A

EBIT/Interest Expense

21
Q

Gross Margin Ratio

A

Sales (net) - COGS/ Sales (net)

22
Q

Profit Margin

A

Net income/Sales (net)

23
Q

how mgmt should approach sell or process further decision?

A

compare incremental revenue vs incremental cost after split off point. If incremental revenue is great, process further, if not, sell after split off point

24
Q

how mgmt approach a make or buy decision?

A

similar to special order decisions, should consider only relevant costs and select lowest cost alternative.

25
Q

how mgmt approach keep or drop decision.

A

compare fixed costs that can be avoided if the segment is dropped with contribution margin that will be lost if segment is dropped. keep if lost contribution margin exceeds avoidable fixed costs

26
Q

how mgmt approach a special order decision?

A

if excess capacity, accept is selling price per unit exceeds variable cost per unit. if operating at full capacity, consider opportunity cost of producing special order

27
Q

DM price variance

A

Actual Q purchased x (actual price - standard price)

28
Q

DM quantity usage variance

A

standard price x (actual Q used - standard Q allowed)

29
Q

DL rate variance

A

actual hours worked x (actual rate - standard rate)

30
Q

DL efficiency variance

A

Standard rate x (actual hours worked - standard hour allowed)

31
Q

VOH rate (spending) variance

A

Actual hours x (actual rate - standard rate)

32
Q

VOH efficiency variance

A

standard rate x (actual hours - standard hours allowed for actual production volume)

33
Q

FOH budget (spending) variance

A

actual fixed overhead - budgeted fixed overhead

34
Q

FOH volume variance

A

budgeted fixed overhead - standard fixed overhead cost allocated to production

35
Q

Sales price variance

A

(actual SP/unit - budgeted SP/unit) x actual sold units

36
Q

Sales volume variance

A

(actual sold units - budgeted sales units) x standard contribution margin per unit