Formulario completo Management Accounting

ONLYHAVEYOUIF PERMULTIPLYTOREMEMBER

• x = TFC *

• Sales($) = TFC *UNITSOFNUMBER see tableUP - UVC % CM CONTRIBUTION MARGIN = (UP • X) - (UVC • X)= unitary C M if more products total %CM UNIT CM = (UP - UVC)• you do not have UVC : 1) X = sales → 2) UVC = total VC % CONTRIBUTION MARGIN = CM remains constantUP X salessalestotal sales not volumeneed to add the tax%b. CASH FLOW break-even point) CM when O.I equals 0 = TOTAL FIXED COST valuein order to have the• Cash fixed costs = total fixed costs - depreciation scarse CM = prod. unit CMreal depreciation cost= total fixed cost - (depreciation + …%) used instead prod. scarse factorof %CM• X = CASH FIXED COSTS weighted CM unit = Σ uCM • weight%a.1 MULTI PRODUCTUP - UVC Sum TFC; %CM (=ΣCM : t.sales)c. MINIMUM PRICE sales = TFC : %CM• UP = TFC + (UVC · Q) Minimum price = unit variable … costs + shipping costs + tot fixed costs|| other way ||Q Qif target O.I is

1. Compute total CM% Product mix - split $2. total sales = …%s + TFCs → s = TFCor PROFITcontribution margin CM% CM% - …% • find total BEP $ *• X • UP - X • UVC - TFC = OPERATING INCOME • Weight% = unit of product→ X = TFC + target O.I → UP = TFC + target O.I(required number of units sold) (required dollar sales) total sales(UP - UVC) % CM • Split value = $ • weight%
2. UNITARY PRICE … ) • Quantity = split valuea.1. when FIXED COSTS increase… when UVC increase of …% | Keeping same CM%a. UP• Total sales $ = TFC + nFC• current CM% = UP - UVC n = new CM%UP c = current• newUVC = UVC + … % p = projected• new UP = nUVC1 - cCM%
3. VOLUME OF SALES )a. Same income | same UP | UVC + … %) pre-tax INCOME = (UP - UVC) • X - TFC• Projected income statement (w/ expected sales volume) nUVC = UVC + …%X = TFC

+ INCOME

Find new UVC and solve for X(UP - nUVC)

• Volume of sales in DOLLARS = RevenuesTR = X • UP* taxes are irrelevant if constant = we use pre-tax income for computation
• Formula : (UP · X) = TFC + (UVC · X) + INCOME

TARGET : after-tax income of …

EXPLANATION :

• Find pre-tax income Profits increases faster
• PRE-TAX INCOME = after-tax income : (1 - … % tax percentage) than volume of sales if we have most of the expenses
• X = TFC + INCOME fixed.(UP - UVC)

4. OPERATING LEVERAGE

• a. Compute the degree of OPERATING LEVERAGE [: change in profit caused by change in volume]
• Operating leverage = contribution margin → higher operating leverage = higher changes in profit

5. CASH MOVEMENTS

• a. CASH LEFT after withdraw of money
• cash produced by operation = net income + depreciation Income statement projections
• cash left = cash produced by operation - money withdrawn

PRICEQUANTITY

6. FIXED vs. VARIABLE COSTS

REVENUE [SALES]

Type of cost

Total cost

Cost per unit

VARIABLE COSTS

Variable Increases Constant ↑ = VARIABLE COSTS

Fixed constant Decreases ↓ = CONTRIBUTION MARGIN

FIXED COSTS

Semi-variable Increases Decreases ↓ FIXED COSTS

Variable part (unit) = change in cost (: change in quantity)

Fixed part = total cost - variable part

7. MARGIN OF SAFETY

a. Compute MARGIN OF SAFETY %

• Compute BEP volume

• Margin of safety units = current volume - BEP volume

Margin of safety % = MOS unit • 100

Margin of safety sales ($) = total sales - BEP sales (• 100)current volume total sales

8. NORMAL SELLING PRICE

a. Compute NORMAL SELLING PRICE

• Normal selling price direct costs + indirect costs + profit→ if needed unit price REMEMBER to DIVIDE by units

b. Compute PROFIT MARGIN as percentage of cost

• desired profit : x = full cost : 100

9. FIXED vs. VARIABLE COSTS

1. Variable Costs:
   • Raw material
   • Direct worker depreciation
   • Advertising
   • Direct packaging
   • Provisions
   • Electricity (to make machine work)
   • Utilities
   • Depreciation
   • Rent
2. Indirect administration costs allocated using overhead rate:
   1. Accumulate in cost centers
   2. Assign cost center costs to product
3. Allocation of Costs:
   1. Reassign overhead costs by cost driver (e.g. percentage of...)
   • Using percent value:
   • Sum the percent of space occupied values (except the one you need to reallocate) to find the new total
   • Find the cost to reallocate = percent of... by center value of the cost center to reallocate
   • Percent total...
   • Using number of...:
   • Sum the number of... that you have (except the one you need to reallocate) to find the new total
   • Find the cost to reallocate = number of... occupied by center value of the cost center to reallocate
   • Number total...
   2. Find overhead rate: use total values quantity

rate = total overhead costs to allocate → value to allocate = overhead rate • cost driver quantity
cost driver (volume A • standard unitary A) + (volume B • standard unitary B)• Sum total costs + the allocated overhead

c. Use PREDETERMINED overhead rate ANNUAL)• sum of all costs : sum of cost driver [≠ overhead rate in which you consider them separately]

d. Plant COST)• total cost : cost of A = total cost of plant : AA = cost of A • total cost of planttotal cost

COSTS)
STANDARD
11. COMPUTATION
ITEM price
standard•quantity
standard
material
Direct rate
standard•time
standard
labour
Direct rate
overhead
predetermined•measure
activity
standard
Overhead

12. MAKE OR BUY)• CEASING COSTS : costs that the firm does not have to pay anymore if decides to buy
- DIRECT LABOUR : shift to other department,; can obtain insurance; becomes 60% part time (40% ceasing); fired/laid off;
- SUPERVISOR : retired; re-employed; employed by other company; use this

computation only for values from the P&L statement

• DEPRECIATION: employed in another department (recovery value/useful life); can be sold (book value depreciation)
• ADMINISTRATIVE COST QUOTE: closure means a decrease of cost
• ENERGY CONSUMPTION: if there is a counter, it is ceasing
• If in the exercise I have a fixed fee and a variable fee → ONLY variable is ceasing
• RISING COSTS: costs that the firm has to pay if it decides to buy
• SERVICE COSTS
• INCREMENTAL ANNUAL MARGIN (…): needs to be removed from service costs

13. VARIANCES

1. a. STANDARD COST SYSTEM VARIANCE

A STANDARD COST SYSTEM generates production cost variances related to:

• Δ quantity
• Direct material variance = usage and price
• MATERIAL USAGE variance = (standard quantity - actual quantity) • standard price
• MATERIAL PRICE variance = (standard price - actual price) • actual quantityΔ price
• Direct labour variance = efficiency and rate
• RATE VARIANCE = [(standard
  1. Labour rate variance = (standard labour rate - actual labour rate) • actual hours
  2. Efficiency variance = [(standard hour rate - actual hour rate) • standard labour rate cost] • actual volume
  3. Rate variance = actual hours : production volume
  4. Depreciation • Overhead variance = production volume and spending > overhead
  5. Absorption rate = budgeted overhead at standard volume : units at standard volume
  6. Absorbed overhead = absorption rate • actual units
  7. Volume variance = absorbed overhead - budgeted overhead at actual volume
  8. Spending variance = budgeted overhead at actual volume - actual overhead
  9. Variable costs variance : Δ price, Δ volume, Δ efficiency
  10. Total variance = (unitary price • efficiency • volume at standard) - (unitary price • efficiency • volume at actual)
  11. Price variance = (unitary standard price - unitary actual price) • efficiency at actual
  • volume at actualtotal cost : total quantitytotal quantity : prod volume
  • Efficiency variance = (efficiency standard - efficiency actual)
  • unitary standard price
  • volume at actual use
  • Volume variance = (volume standard - volume actual)
  • unitary
  • unitary standard price
  • volume at standard mustmust use TOTAL valuesc. FIXED PRODUCTION COSTS VARIANCE : Δ volume, Δ expenses)
  • Variance expense = (budget cost at actual volume - actual level cost)actual cost
  • Variance volume = [(budget cost at budget volume) - (budget cost at actual volume)] actual volumebudget budgetbudget volume actual volume if you have different budget prices at
  • Total variance = budget cost at budget volume actual volume - actual cost different rangebudget volume search the budgeted cost correspondingor = variance expense + variance volume (easier to remember ) to the actual volume givend. FIXED ADMINISTRATION COMMON COST : Δ

  expenses)

  • Variance expense = fixed cost (from budget column) at actual volume - actual cost at actual volume

  Variances of REVENUES (price) in MULTI PRODUCT company

  Budget Volume	Actual Volume	to produce one of them (Quantity)	Sales (Quantity)	Unitary price	Standard cost unit price	actual cost
  A	...	...	...	...	...	...
  B	...	...	...	...	...	...

  Calculate variance of revenues

  Actual	Flexible	Column C	Budget
  Sales = step 1 = step 3 step 4 = step 2	(Std vol * std UP)	(= step 3 sales)	(Std UP * actual vol.)
  COGS = step 1 = step 3 step 4 = step 2	(not to be found)	(Actual vol * std cost)	(= step 1 COGS)	(Std. vol * std cost)
  C.M. subtract COGS from SALES ??? subtract COGS from SALES.	1 CM	CM%	CM%
  step sales%	C.M.	4Variance price = CM actual - CM flexible	* we cannot use the column to calculate the sales → Variance mix

  CM flexible - CM column c because it's not part of the sales management, it depends on the production

  Variance volume = CM column c - CM budget departments (= isolate the responsibility of sales people {outside their scope})

  Total Variance = sum of variances || Total variance = actual - budget

  REVENUES VARIANCE

  Compute:

  • standard %mix = sale ... : to