Planning, Control, and Analysis

Question 1

Planning, Control, and Analysis

What is the formula for the Breakeven point in dollars?

Answer 1

Planning, Control, and Analysis

BEP in dollars = Total Fixed Costs/ (CM%)

Question 2

Planning, Control, and Analysis

What are the effects when production levels are expected to DECLINE within a relevant range, and a flexible budget is used?

Answer 2

Variable Costs/ unit- no change

Fixed Costs/ unit- increase

Question 3

Planning, Control, and Analysis

What is the Breakeven point formula (in units)?

Answer 3

BEP in units = (Total Fixed Costs/ Unit Contribution Margin)

Question 4

Planning, Control, and Analysis

Describe the formula for Production requirements

Answer 4

Production Requirements

Raw Materials Needed = Projected Sales - BI + Desired EI

Question 5

Planning, Control, and Analysis

Describe the Contribution Margin Percentage Formula

Answer 5

CM % = Total Contribution Margin/ Revenues

Question 6

Planning, Control, and Analysis

Define Margin of Safety

Answer 6

Margin of Safety- defines how far revenues can fall before the breakeven point is reached.

Question 7

Planning, Control, and Analysis

Describe the 95% confidence interval calculation

Answer 7

95% confidence interval calculation

Standard error of the regression x deviation area

Question 8

Planning, Control, and Analysis

Define Contribution Margin

Answer 8

Contribution Margin = Sales - Variable Costs

Question 9

Planning, Control, and Analysis

Define Material Price Variance

Answer 9

Material Price Variance = Actual Quantity x (AP- SP)

Question 10

Planning, Control, and Analysis

Define Total Costs

Answer 10

Total Costs = Fixed Costs + Variable Costs

Question 11

Planning, Control, and Analysis

What does the Financial Budget consist of?

Answer 11

Financial budget consists of Capital Budget, Cash Budget, Budgeted Statement of Cash Flows

Question 12

Planning, Control, and Analysis

What does the Operation Budget consist of?

Answer 12

Operating Budget consists of Budgeted I/S, Supporting Budget

Question 13

Planning, Control, and Analysis

What is the one thing to remember when solving for Material Efficiency Variances and Material Quantity Variances?

Answer 13

Material Efficiency Variances (ME)
Material Quantity Variances (MQ)

USE STANDARD/ BUDGETED AMOUNTS

Question 14

Planning, Control, and Analysis

What happens at the Breakeven Point?

Answer 14

At Breakeven Point

Sales - Variable Costs - Fixed Costs = 0

Question 15

Planning, Control, and Analysis

Describe the Cost Accounting Formula

Answer 15

Cost Accounting Formula

Sales
-VC
\_\_\_\_\_\_\_
CM
-FC
\_\_\_\_\_\_\_\_
NI

Question 16

Planning, Control, and Analysis

Define Sensitivity Analysis

Answer 16

Sensitivity analysis is any process that measures the impact of a change in a single variable or a combination of variables on profits or on some other decision variable. That is, it is a technique to analyze the alternatives before the decision is made by measuring how changes in the critical assumptions will influence the results. Sensitivity analysis asks “what if?” Expected value analysis is used to determine the mean value of a random variable over an infinite number of outcomes.