# acc 2 - Assigned overhead = POHR standard activity POHR =...

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ROI = Net operating income / average operating assets Margin = net operating income / sales Turnover = sales / average operating assets  ROI = margin * turnover  Division return on investment: ROI = net operating income / average operating assets  Division margin: Margin = net operating income / sales. Division turnover: turnover = sales / average operating assets Minimum required rate of return: minimum required return = net operating income – residual  income Then minimum rate of return = minimum required return / average operating assets  Material price variance: AQ (AP –SP)   Material quantity variance: SP (AQ- SQ) Labor rate variance: AH (AR –SR)   Labor efficiency variance: SR (AH –SH) Spending variance= AH (AR –SR)   Efficiency variance = SR (AH – SH)
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Unformatted text preview: Assigned overhead = POHR * standard activity POHR = overhead from the flexible budget for the denominator level of activity / denominator level of activity Contribution margin ratio = Total CM / Total sales In terms of units , the contribution margin ratio is CM Ratio = Unit CM / Unit selling Price Break-Even Analysis Equation method = Sales = Variable expenses + Fixed expenses + Profits Break-even point in units sold = Fixed expenses / CM per unit Break-even point in total sales dollars = Fixed expenses / CM ratio Present value of \$ 1 ; 1 / (1 + r) n Present value of an annuity of \$ 1 in arrears; 1/r [ 1 – 1/(1=r) n ]...
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