MGMT_(201)_Ganguly_Final_Extended_Review

MGMT_(201)_Ganguly_Final_Extended_Review - MGMT201...

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Unformatted text preview: MGMT201 (Ganguly): Final Extended Review Caveat: The slides in this presentation are excerpted from the class lecture slides, and will therefore not tell a complete story in and of themselves... But the complete story will be available in the original class lecture slide sequences. 1 1. Basic Ideas (Ch. 1 & 2) Managerial Accounting Basics Product Cost vs. Period Cost Direct Costs vs. Indirect Costs Prime Cost & Manufacturing Overheads Material Costs, Conversion Costs, Total Costs Variable, Fixed and Semi­Variable Costs Opportunity Costs & Sunk Costs Marginal Costs vs. Average Costs COGS & COGM schedules & cost flows 2 Classifications of Costs in Manufacturing Companies Manufacturing costs are often combined as follows: Direct Material Direct Labor Manufacturing Overhead Prime Cost Conversion Cost 3 Manufacturing Cost Flows Costs Material Purchases Direct Labor Manufacturing Overhead Balance Sheet Inventories Raw labor and Material,Material manufacturing overhead costs Work in remainPin inventory rocess until the product is sold, so they are Finished sometimes called Goods inventoriable costs. Income Statement Expenses Cost of Goods Sold Selling and Administrative 4 Selling and Administrative Period Expenses Raw-material inventory, January 1 Add: Purchases of raw materials Schedule of Cost of Goods Schedule of Cost of Goods Manufactured Computation of Cost of Raw Material Used $ 6,000 134,000 140,000 5,020 Raw material available for use Deduct: Raw material inventory, December 31 Raw material used Comet Computer Corporation $ 134,980 Schedule of Cost of Goods Manufactured Raw material used Direct labor Total manufacturing overhead Total manufacturing costs Add: Work-in-process inventory, January 1 S ubtotal Deduct: Work-in-process inventory, December 31 Cost of goods manufactured $ $ $ $ 134,980 50,000 230,000 414,980 120 415,100 100 415,000 5 Income Statement for a Income Statement for a Manufacturer Comet Computer Corporation Schedule of Cost of Goods Sold For the Year Ended December 31, 20X2 Finished-goods inventory, Jan. 1 Add: Cost of goods manufactured $ 200 415,000 415,200 190 Cost of goods available for sale Comet Computer Corporation Deduct Finished-goods inventory, Dec. 31 Cost of goods sold Income Statement $ 415,010 For the Year Ended December 31, 20X2 $ $ $ $ Sales revenue Less: Cost of goods sold Gross margin Selling and administrative expenses I ncome before taxes I ncome tax expense Net income 700,000 415,010 284,990 174,490 110,500 30,000 80,500 6 2. Job Order & Normal Costing (Ch. 3) Application of Overheads Predetermined Overhead Rate Over­Application & Under­Application of overheads Adjustments due to over­ or under­application of overheads, both through COGS and by prorating to WIP, Fin. Goods & COGS Profit maximizing output (e.g. 2­58) 7 Review the Flow of Manufacturing Costs Work-in-Process Direct Materials Direct Labor Manufact. Overhead Transfer Costs Finished Goods Inventory Sell Product Transfer Product Costs When Product Is Finished Cost of Goods Sold Income Summary Close Expense at the End of the Accounting Period 8 Review the Flow of Manufacturing Costs Work-in-Process Direct Materials Direct Labor Manufact. Overhead Finished Goods Inventory wait until the end of the period to find Income Summary Cost of Goods Sold out what the manufacturing Transfer Close Expense at overheads will be! Costs the End of the Accounting Period 9 Transfer Product Sell Costs When Product Product But… Managers can’t Is Finished Explain Overhead Application & Absorption (Normal Costing) The process of assigning overhead to production jobs = Budgeted Manufacturing Overhead Cost Budgeted Amount of Cost Driver (0r Activity Base) Predetermined overhead rate Overhead is applied based upon actual quantity of cost driver used 10 Summarize Accounting for Manufacturing Overheads Beginning of accounting period End of accounting period Accounting Period Time Actual overhead measured Budgeted overhead (& calculation of predetermined overhead rate Application of overhead 11 Illustrate the Manufacturing Overhead Account Manufacturing Overhead Actual MO costs are accumulated as incurred MO is applied to production jobs At pre­detrmined overhead rates Various Accounts Associated credits to various accounts Work-in-Process MO is added to Work-inProcess Inventory 12 Closing to Cost of Goods Sold In case of Overapplication Debit Manufacturing Overhead; Credit Cost of Goods Sold Debit Cost of Goods Sold; Credit Manufacturing Overhead In case of Underapplication 13 Closing by pro­rating In case of Overapplication Debit Manufacturing Overhead; Credit WIP (inventory), Finished Goods (inventory) and Cost of Goods Sold Debit WIP (inventory), Finished Goods (inventory) and Cost of Goods Sold; Credit Manufacturing Overhead In case of Underapplication 14 3. ABC Costing (Ch. 5) Two­stage allocation of overheads instead of one­stage allocation Plant­wide vs. Department­wide vs. ABC allocations “Traditional” vs. ABC allocation methods Identifying cost drivers Dividing activities into cost pools and then allocating based on pool rates Unit costs and total costs 15 Traditional, Volume­Based Product­Costing System Budgeted manufacturing overhead Budgeted Budgeted direct-labor hours Budgeted $3,894,000 118,000 = $33 per hour 16 What are examples of activities? Possible Activity examples Unit Level Machining Machine Depreciation Lubrication Setup Programming robots Engineer’s salaries Engineering software Possible Driver examples Units Direct Labor Hours Machine Hours No. of runs (batches) Percentage of activity for each product line Hours of engineering time Direct Labor Hours 17 Batch Level Product Sustaining Facility Level Plant Managing Property Taxes Insurance ABC is the most complex… Activity-Based Costing Departmental Overhead Rates Plantwide Overhead Rate L ve e p om fC lo ity ex l Overhead Allocation 18 Overhead Costs Activity must be done on each unit produced. Total budgeted cost = $3,894,000 Activity Cost Pools ProductSustaining Level Engineering cost pool $700,000 Identification of Activity Cost Pools Unit Level Machinery cost pool $1,212,600 Activity performed on each batch produced. Batch Level Setup cost pool $3,000 Facility Level Facility cost pool $507,400 Activities needed to support an entire product line Activity required in order for the production process to occur. 19 STAGE ONE Various overhead costs related to machinery to machinery Maintenance Depreciation Computer Support Lubrication Electricity Calibration Activity cost pool Machinery Cost Pool Total budgeted cost = $1,212,600 20 STAGE TWO Calculate the pool rate Budgeted Machinery Costs = $1,212,600 Budgeted Machine Hours 43,000 = $28.20/hour $28.20/hour Cost Assignment Driver selected: Machine hours 21 The devil here is in the detail…. So work out a lot of HM and Self­Study Exercises/Problems WITHOUT LOOKING 22 4. Process Costing (Ch. 4) Equivalent units of production (weighted average) Total costs to account for Costs per equivalent unit: Material Cost per equivalent unit Conversion Cost per equivalent unit Total Cost per equivalent unit Cost of goods transferred out Cost of ending (or beginning) WIP inventory Production in batches: operation costing 23 Salaries and Wages Payable Process Cost Flows •Direct Labor •Indirect Labor Work in Process Department A •Direct Material •Direct Labor •Overhead Factory Overhead Overhead •Other Overhead Applied to Work in •Indirect Material Process •Indirect Labor 24 Process Cost Flows Work in Process Department A •Direct •Transferred Material to Dept. B •Direct Labor •Overhead Work in Process Department B •Transferred from Dept. A 25 Process Cost Flows Raw Materials •Purchases •Direct Material Work in Process Department A •Direct •Transferred Material to Dept. B •Direct Labor •Overhead Work in Process Department B Salaries and Wages Payable •Direct Labor •Transferred from Dept. A •Direct Material •Direct Labor 26 Process Cost Flows Work in Process Department A Factory Overhead •Overhead •Other Overhead Applied to Work in •Indirect Material Process •Indirect Labor •Direct •Transferred Material to Dept. B •Direct Labor •Overhead Work in Process Department B •Transferred from Dept. A •Direct Material •Direct Labor •Overhead 27 Process Cost Flows Work in Process Department B •Transferred •Cost of from Dept. A Goods •Direct Mfd. Material •Direct Labor •Overhead •Cost of Goods Sold Finished Goods •Cost of Goods Mfd. •Cost of Goods Sold Cost of Goods Sold 28 We now move on to the Excel Spreadsheets. 29 (5) Lectures 10­11 & Recit Wk 6 Absorption vs. Variable Costing 30 Absorption and Variable Costing Absorption Costing Direct materials Direct labor Variable mfg. overhead Fixed mfg. overhead Period costs Period costs Selling & Admin. exp. Variable Costing Product costs Product costs The difference between absorption and variable costing is the treatment of fixed manufacturing overhead. 31 Variable Costing Variable Costing Income Statements Now let’s look at variable costing by Mellon Co. Variable Costing Sales (20,000 × $30) Less variable expenses: Beginning inventory Add COGM (25,000 × $10) Goods available for sale Ending inventory (5,000 × $10) Variable cost of goods sold Variable selling & administrative e xpenses (20,000 × $3) Contribution margin Less fixed expenses: Manufacturing overhead Selling & administrative expenses Net income $ 600,000 $ 250,000 $ 250,000 50,000 $ 200,000 60,000 260,000 $ 340,000 $ 150,000 100,000 250,000 $ 90,000 32 Absorption Costing Income Statements Mellon Co. had no beginning inventory, produced 25,000 Mellon Co. had no beginning inventory, produced 25,000 units and sold 20,000 units this year at $30 each. Absorption Costing Sales (20,000 × $30) Less cost of goods sold: Beginning inventory $ Add COGM (25,000 × $16) 400,000 Goods available for sale $ 400,000 Ending inventory (5,000 × $16) 80,000 Gross margin Less selling & admin. exp. Variable (20,000 × $3) $ 60,000 Fixed 100,000 Net income $ 600,000 320,000 $ 280,000 160,000 $ 120,000 33 Comparing Absorption and Comparing Absorption and Variable Costing Let’s compare the methods. Cost of Goods Sold Absorption costing Variable mfg. costs $ 200,000 Fixed mfg. costs 120,000 $ 320,000 Variable costing Variable mfg. costs $ 200,000 Fixed mfg. costs $ 200,000 Ending I nventory $ 50,000 30,000 $ 80,000 Period Expense $ $ Total $ 250,000 150,000 $ 400,000 $ 50,000 $ 50,000 $ 150,000 $ 150,000 $ 250,000 150,000 $ 400,000 34 Reconciling Income Under Absorption and Variable Costing We can reconcile the difference between absorption and variable net income as follows: Variable costing net income Add: Fixed mfg. overhead costs deferred in inventory (5,000 units × $6 per unit) Absorption costing net income $ 90,000 $ 30,000 120,000 Fixed mfg. overhead $150,000 = Units produced 25,000 = $6.00 per unit 35 Summary Comparison of Absorption (AC) and Variable Costing (VC) Production versus Sales Total I nventory Effect Period Expense Effect Fixed mfg. costs expensed AC Fixed mfg. costs expensed AC Fixed mfg. < costs expensed VC Fixed mfg. > costs expensed VC Profit Effect Produced > Sold Increase AC > VC Produced < Sold Decrease AC < VC Produced = Sold No change Fixed mfg. Fixed mfg. costs expensed = costs expensed AC VC AC = VC For the two-year period, units produced equals units sold, so total absorption income equals total variable income. 36 Practice exam #9 Practice exam #4 Practice exam #14 37 Throughput Costing Example In an automated process direct material may be the only unit-level cost and so is the only product cost. All other manufacturing costs are expensed as period costs. Incentive to overproduce is reduced Average unit cost does not vary with changes in production levels. Advantages 38 (6) Lectures 12­13 & Recit Wk 7 CVP Analysis 39 Contribution­Margin Approach Fixed expenses Fixed Unit contribution margin Sales (500 surf boards) Less: variable expenses Contribution margin Less: fixed expenses Net income Break-even point = (in units) Per Unit $ 500 300 $ 200 Percent 100% 60% 40% Total $250,000 150,000 $100,000 80,000 $ 20,000 $80,000 $80,000 $200 $200 = 400 surf boards 40 Contribution Margin Ratio Often used to calculate the break­even point in sales dollars rather than units. Contribution margin Contribution Sales Sales @ BEP = CM Ratio Fixed expense Fixed CM Ratio CM Break-even point = (in sales dollars) 41 Now, Target Net Profit We can determine the number of surfboards that Curl must sell to earn a profit of $100,000 using the contribution margin approach. Fixed expenses + Target profit Target Unit contribution margin Unit = Units sold to earn the target profit $80,000 + $100,000 $200 = 900 surf boards 42 CVP Analysis with Multiple Products Weighted-average unit contribution Weighted-average margin margin $200 × 62.5% 43 CVP Analysis with Multiple Products Break-even point Break-even Fixed expenses = point Weighted-average unit contribution margin Break-even = point $170,000 $331.25 Break-even = 514 combined unit sales point 44 CVP Analysis with Multiple Products Break-even point Break-even = 514 combined unit sales point 45 Practice exam #s 5&6 Practice Exam #10 Practice Exam Section II #2 46 Measuring Operating Leverage Operating leverage factor = Contribution margin Net income $100,000 $100,000 =5 $20,000 $20,000 47 Practice exam #15 48 (7) Lectures 14­16 & Recit Wks 8,9 Decision Making & CVP 49 Relevant Costs Worldwide Airways is thinking about replacing a three year old loader with a new, more efficient loader. New loader List price Annual operating expenses Expected life in years Old loader Original cost Remaining book value Disposal value now Annual variable expenses Remaining life in years $ 15,000 45,000 1 $ 100,000 25,000 5,000 80,000 1 50 Relevant Costs The difference in operating costs is relevant relevant to the immediate decision. 51 Prtactice Exam #1 Practice exam #7 52 Relevant Costs Here is an analysis that includes only relevant costs: 53 Accept or Reject a Special Order With excess capacity . . . Relevant costs usually will be the variable costs associated with the special order. Without excess capacity . . . Same as above but opportunity cost of using the firm’s facilities for the special order are also relevant. 54 Accept or Reject a Special Order For example, in the lecture problem, what happens if Worldwide had no excess capacity? If Worldwide adds the charter, it will have to cut its least profitable route that currently contributes $80,000 to fixed costs and profits. Should Worldwide still accept the charter? 55 Accept or Reject a Special Order Worldwidehas no e ss capacity, so it should re ct the xce je Worldwide spe charte cial r. spe 56 Outsource a Product or Service Not all of the allocated fixed costs will be saved if Worldwide purchases from the outside bakery. 57 Outsource a Product or Service For decision­making purposes, unitized fixed costs can be misleading. Beware of Unit­Cost Data 58 Add or Drop a Product 59 Summary DECISION RULE The company should drop the digital watch The segment only if its fixed cost savings exceed lost contribution margin. exceed 60 Joint Processing of Cocoa Bean Cocoa beans costing $500 per ton Joint Production process costing $600 per ton Cocoa butter sales value $750 for 1,500 pounds Split-off point Cocoa powder sales value $500 for 500 pounds Separable process costing $800 Total joint cost: $1,100 per ton Instant cocoa mix sales value mix sales $2,000 for 500 pounds 61 Joint Products Thecocoa powde should be r proce d into instant cocoa m sse ix. proce 62 Practice exam #13 Practice Exam Section II #3 63 Joint Products Cost – irrelevant for the further processing decision Relative Sales Value Method 64 Limited Resources The lathe is the scarce resource because there is excess capacity on other machines. The lathe is being used at 100% of its capacity. The lathe capacity is 2,400 minutes per week. Should Martin focus its efforts on Webs or Highs? 65 Limited Resources Let’s calculate the contribution margin per unit of the scarce resource, the lathe. Highs should be emphasized although the contribution/unit was much greater for Webs. This decision results in the more valuable use of the scarce resource the lathe, yielding a contribution margin of $30 per minute as opposed to $24 per minute for the 66 Webs. Practice Exam #1 Practice exam #10 67 (8) Lectures 17­19 & Recit Wk 9 Long­Run Decision Making (NPV, IRR, Payback, ARR etc.) 68 Net­Present­Value Method Mattson should accept the contract because the present value of the cash inflows exceeds the present value of the cash outflows by $85,955. The project has a positive net present value. positive 69 Internal­Rate­of­Return Method Future cash flows are the same every year in this example, so we can calculate the internal rate of return as follows: Investment required Net annual cash flows Net $104, 320 $20,000 $20,000 = Present value factor Present = 5.216 5.216 Explanation: We just saw that Annual Cash Flows * PV Factor = Investment Required 70 Internal­Rate­of­Return Method The present value factor (5.216) is located on the Table IV in the Appendix. Scan the 10period row and locate the value 5.216. Look at the top of the column and you find a rate of 14% which is the internal rate of return. which $104, 320 $20,000 $20,000 = 5.216 Microsoft Excel Worksheet 71 Alternative Methods for Making Investment Decisions Payback Method Payback Initial investment = period Annual after-tax cash inflow Annual Assumes uniform cash inflows over life! A company can purchase a machine for $20,000 that will provide annual cash inflows of $4,000 for 7 years. Payback = period $20,000 $4,000 $4,000 = 5 years 72 Accounting­Rate­of­Return Method The following formula is used to calculate the accounting rate of return: Accounting rate of return Average Average incremental - incremental expenses, incremental revenues including depreciation revenues = Initial investment 73 Total­Cost Approach. Incremental­Cost Approach. To compare competing investment projects using net present value, we can use either of these equivalent approaches: 74 Incremental­Cost Approach Incremental investment Incre. cost of brushes Increased net cash inflows Salvage old equipment Salvage new equipment Net present value Year Now 6 1-10 Now 10 Cash Flows $ (125,000) $ 30,000 15,000 40,000 7,000 10% Factor 1.000 0.564 6.145 1.000 0.386 Present Value $ (125,000) 16,920 92,175 40,000 2,702 $ 26,797 We get the same answer under either the total-cost and incremental-cost approach. 75 Noncash Expenses & Tax Shields Here is a complete depreciation schedule for High Country. Depreciation Tax Shield 76 Net present value of the proposal. For example, in another problem… The present value of the proposal is less than the cost of the equipment ($100,000). The proposal has a negative net present value. Ding! You could also have included the cost explicitly in the calculation with a PV factor =1 77 Practice exam #2 Practice Exam Section II #1 78 (9) Lectures 20­21 & Recit Wk 11 Budgeting 79 Sales Budget April Budgeted sales (units) 20,000 Selling price per unit $ 10 Total Revenue $200,000 May 50,000 $ 10 $ June 30,000 10 $ Quarter 100,000 10 $500,000 $300,000 $1,000,000 80 Production Budget Production Budget Sales in units Add: desired end. inventory Total needed Less: beg. inventory Units to be started April 20,000 10,000 30,000 4,000 26,000 May 50,000 6,000 56,000 10,000 46,000 June 30,000 5,000 35,000 6,000 29,000 Quarter 100,000 5,000 105,000 4,000 101,000 81 Practice exam #3 (NOT 42,250!) 82 Direct­Material Budget 83 Direct­Labor Budget 84 Overhead Budget Here is Breakers’ Overhead Budget for the quarter. 85 Selling and Administrative Expense Budget 86 Cash Receipts Budget 87 Practice exam #12 88 Cash Disbursement Budget 89 Cash Disbursement Budget Continued 90 Cash Disbursement Budget Financing and Repayment 91 Budgeted Ending Inventory Manufacturing overhead is applied on the basis of direct labor hours. Production costs per unit Direct materials Direct labor Manufacturing overhead Quantity Cost 5.00 lbs. $ 0.40 0.10 hrs. $ 8.00 0.10 hrs. $18.02 $ Total 2.00 0.80 1.80 4.60 $ Budgeted finished goods inventory Ending inventory in units Unit product cost Ending finished goods inventory 5,000 $ 4.60 $23,000 Total overhead $191,000 = $18.02 per hr.* Total labor hours 10,600 hrs. *rounded 92 Budgeted Income Statement Breakers, Inc. Budgeted Income Statement For the Three Months Ended June 30 Revenue (100,000 × $10) Cost of goods sold (100,000 × $4.60) Gross margin Operating expenses: Selling and admin. Expenses Interest expense Total operating expenses Net income $ 1,000,000 460,000 540,000 $ 260,000 838 $ 260,838 279,162 93 25%of June sales of $300,000 11,500 lbs. at $.40 per lb. 5,000 units at $4.60 per unit. 94 Practice exam #3 Practice exam #11 Practice exam #8 [nice ] Practice Exam #12 95 Variable Cost variances 10. Variance Analysis & Flexible Budgets (Ch. 10 & 11) Material Price & Quantity Variance Labor Rate & Efficiency Variance Variable Overhead Spending and Efficiency Total variance Variance Fixed Overhead Budget & Volume Variance Flexible Budgets & Performance Evaluation 96 A General Model for Variable Cost Variance Analysis Actual Quantity × Actual Price Actual Quantity × Standard Price Standard Quantity × Standard Price Price Variance Quantity Variance Standard price is the amount that should have been paid for the resources acquired. 97 A General Model for Variance Analysis Actual Quantity × Actual Price Actual Quantity × Standard Price Standard Quantity × Standard Price Price Variance Quantity Variance Standard quantity is the quantity allowed for the actual good output. 98 Material Variances Summary Actual Quantity × Actual Price 1,700 lbs. × $3.90 per lb. $6,630 Actual Quantity × Standard Price 1,700 lbs. × $4.00 per lb. $ 6,800 Standard Quantity × Standard Price 1,500 lbs. × $4.00 per lb. $6,000 Price variance $170 favorable Quantity variance $800 unfavorable 99 Labor Variances Summary Actual Hours × Actual Rate 1,550 hours × $10.20 per hour $15,810 Actual Hours × Standard Rate 1,550 hours × $10.00 per hour $15,500 Standard Hours × Standard Rate 1,500 hours × $10.00 per hour $15,000 Rate variance $310 unfavorable Efficiency variance $500 unfavorable 100 Labor Rate Variance – A Closer Look Using highly paid skilled workers to perform unskilled tasks results in an unfavorable rate variance. High skill, high rate Low skill, low rate Production managers who make work assignments are generally responsible for rate variances. 101 Labor Efficiency Variance – A Closer Look Poorly trained workers Poor quality materials Unfavorable Efficiency Variance Poor supervision of workers Poorly maintained equipment 102 Variable Overhead Variances Actual Variable Overhead Incurred AH × AR Flexible Budget for Variable Overhead at Actual Hours AH × SVR Flexible Budget for Variable Overhead at Standard Hours SH × SVR Spending Variance AH AR SVR SH Efficiency Variance = Actual Hours of Activity = Actual Variable Overhead Rate = Standard Variable Overhead Rate = Standard Hours Allowed 103 Actual Variable Overhead Incurred Variable Overhead Variances – Example Flexible Budget for Variable Overhead at Actual Hours 3,300 hours × $2.00 per hour $6,600 Flexible Budget for Variable Overhead at Standard Hours 3,200 hours × $2.00 per hour $6,400 $6,740 The $140 unfavorable spending variance and the $200 unfavorable efficiency variance result in a $340 unfavorable flexible budget variance. 104 Variable Overhead Variances – A Closer Look Spending Variance Efficiency Variance A function of the selected cost driver. It does not reflect overhead control. Results from paying more or less than expected for overhead items and from excessive usage of overhead items. 105 Fixed Overhead Variances – Fixed Overhead Variances – Example Actual Fixed Overhead Incurred Fixed Overhead Budget Fixed Overhead Applied 3,200 hours × $3.00 per hour $9,600 $8,450 $9,000 Budget variance $550 favorable Volume variance $600 (neither favorable nor unfavorable) 106 Budget Variance Fixed Overhead Variances – A Closer Look Volume Variance Results from paying more or less than expected for overhead items. Results from the inability to operate at the activity level planned for the period. Has no significance for cost control. 107 Static Budgets and Performance Reports Static Budget Machine hours Variable costs I ndirect labor I ndirect materials Power Fixed costs Depreciation I nsurance Total overhead costs 10,000 $ 40,000 30,000 5,000 12,000 2,000 $ 89,000 Actual Results 8,000 $ 34,000 25,500 3,800 12,000 2,000 $ 77,300 Variances 2,000 U $6,000 F 4,500 F 1,200 F 0 0 $11,700 F 108 Preparing a Flexible Budget Variable Cost Per Hour Machine hours Variable costs I ndirect labor I ndirect material Power Total variable cost Fixed costs Depreciation I nsurance Total fixed cost Total overhead costs 4.00 3.00 0.50 7.50 $12,000 2,000 Total Fixed Cost Flexible Budgets 8,000 10,000 12,000 Hours Hours Hours 8,000 $ 32,000 24,000 4,000 $ 60,000 $ 12,000 2,000 $ 14,000 $ 74,000 10,000 $ 40,000 30,000 5,000 $ 75,000 $ 12,000 2,000 $ 14,000 $ 89,000 12,000 $ 48,000 36,000 6,000 $ 90,000 $ 12,000 2,000 $ 14,000 $ 104,000 109 $ Flexible Budget Performance Report Variable Cost Per Hour Machine hours Variable costs I ndirect labor $ I ndirect material P ower Total variable costs $ Fixed Expenses Depreciation I nsurance Total fixed costs Total overhead costs 4.00 3.00 0.50 7.50 $12,000 2,000 Total Fixed Costs Flexible Budget 8,000 $ 32,000 24,000 4,000 $ 60,000 $ 12,000 2,000 $ 14,000 $ 74,000 Actual Results 8,000 $ 34,000 25,500 3,800 $ 63,300 $ 12,000 2,000 $ 14,000 $ 77,300 Variances 0 $ 2,000 U 1,500 U 200 F $ 3,300 U 0 0 0 $ 3,300 U 110 Order of Importance 1. 1. 2. What was done in class (but this is only background!) What was done in HM Practice Quizzes & Exams, Actual Quizzes & Exams 1. Class notes (relate these to readings) Class Slides 2. 3. 4. 1. 2. What was Done in Recitations You have TEN of these! 5. 6. Other Self­Study Questions Other readings­related matters not specifically covered above 111 Reviews/recapitulations Self­Study Questions worked out Please remember to… Bring your University Picture ID Bring a calculator that Please acquire a duplicate if you have lost or misplaced it Is NOT programmable Is NOT a Financial Calculator (cannot do IRR, NPV, etc. (Simple $3.00 calculators with four basic functions and memory are best.) Location already known from SIS Check e­mail 2 days before the exam for info. on seat assignment. 112 Seating: Other details 25 multiple choice questions; 3­4 exercises Arrive 15 minutes early for the exam We will start on time Positively finish in 2 hours (NO extra time for writing names, filling bubbles, etc.) Point distribution will generally be given Don’t obsess over bad (or good) answers 113 Pace yourself …a few “final words” For those on scholarships, special programs, etc. requiring a minimum grade from this course This is a major event for you. If you “need” a good grade, here’s your “final” chance to get it! Now is your chance to show how hard you worked for the course. [“Don’t tell me you worked hard for the course; show me!”] Course grades will be made exclusively on the basis of your scores and related information given in the syllabus (not on the basis of how hard you claim to have worked, your “need” for a particular grade, or any other consideration) 114 …a few more “final words” AFTER THE FINAL EXAM Please do not send e­mail or call the professor or TAs asking when the grades will be ready Please check Katalyst starting approximately a week after the final exam and all grade information will be posted Queries will not help the grading process to happen faster: it may delay it further As usual, clarifications on grade information will be in an announcement on the Katalyst events page If you want to check the Final exam grading, please contact us after the second week of June. Any errors will of course be corrected and the grade adjusted, but there will be no change of grade for any consideration other than errors. Of course, Checkpoint 3 scores will be posted on the last day of class including ALL OTHER scores and you will have until the final exam day to dispute those. 115 Good Luck! 116 ...
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