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Quiz 3 - variable/fixed Rows budgeted(end row totals...

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Segment Reporting - Columns: Totals | Segment 1 | Segment 2. Rows: Sales- Variable expenses= Contribution Margin- traceable fixed expenses= divisional segment margin- common fixed expenses (just total column)= NOI Further? Segment Column numbers now total , info new columns, same end # Return on Investment = Net operating income/ avg operating assets= Margin x Turnover. Margin= NOI/Sales. Turnover= Sales/ Avg operating assets. Alter: increase sales, reduce expenses, reduce assets. Residual Income = NOI- (% x Avg Operating Assets) columns are divisions . Might compare ROI/ Residual Transfer pricing - Cost-Based- Lowest: Variable cost + CM on lost sales/# units transferred (when operating at capacity) . Highest: Cost of buying it from outside supplier. CM= Sales- Variable. Allocating Service Costs - BEG: Columns-departments. Rows-var costs(budget hours x budget var price), fixed costs (total budget x %), total. END: Columns-departments, total. Rows- var costs(budget var price x actual hours), fixed costs (same). Unallocated: Columns-
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Unformatted text preview: variable/fixed. Rows- budgeted (end row totals)- actual (given)= unallocated Relevant Costs- avoidable costs- eliminated in whole or part. Sunk never relevant (depreciation, general OH, fixed) . Eliminate costs that do not differ. Materials- original cost- never relevant, replace- if keep buying, salvage- if leftover. Special Order- incremental rev- DM-DL-mold-var. oh= +?-? Constrained Resources- (CM/constrained resource allocation base) Joint product costs- revenue- costs= benefit. Ignore joint Δ Δ allocated costs. EX) Capacity=300,000, Sell Price=40, Var. cost=18, Fix cost=7, wants 50,000 for less than 39. A) operating at capacity: 18+ (1,100,000/50,000) =40. (40,39) No. B) operating at capacity can avoid $4 variable: 14+(1,100,000/ 50,000)= 36. (36,39) Yes . C)Not at capacity: 18. (18,39) Yes . D)Wants 20,000 heavy duty variable 27 operating capacity displace 22,000 regular batteries: 27+ (22x22000/20,000)= 51.2. (51.2,60). Yes....
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Quiz 3 - variable/fixed Rows budgeted(end row totals...

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