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C294_Formula_Sheet

# C294_Formula_Sheet - Fixed OH Spending variance = Actual...

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Final Review Sheet C294 Cost Volume Profit Analysis (CVP) Formulae Break Even Point – point at which revenues = total costs (i.e. zero profit) B/E = Total fixed costs + Profit = # units to sell to break even CM per unit = Total fixed costs + Profit = amount of sales \$ to break even %CM CVP with target income taxes B/E = (Desired Net Income/1-tax rate) + fixed costs = sales \$ to break even %CM Standard Costing – Variance Analysis AQ – Actual Quantity AH – Actual Hours AP – Actual Price Paid AR – Actual Rate Paid SQ – Standard Quantity SH – Standard Hours SP – Standard Price SR – Standard Rate Material Price Variance = AQ (total quantity) purchased * (AP – SP) Material Quantity Variance = SP * (AQ – SQ) Labour Rate Variance = AH * (AR – SR) Labour Efficiency Variance = SR * (AH – SH) Variable OH spending Variance = AH * (AR – SR) Variable OH Efficiency Variance = SR * (AH – SH)

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Unformatted text preview: Fixed OH Spending variance = Actual fixed costs – budgeted fixed costs Final Review Sheet C294 Sales Price Variance = AQ * (AP – SP) Final Review Sheet C294 Transfer Pricing Minimum Transfer Price – leaves the selling division no worse if the goods were sold to an internal division than if the goods were sold to an external party Min. Transfer Price = outlay costs + opportunity costs = unit variable costs + relevant fixed costs + CM from outside customers = Outside customer selling price Maximum Transfer Price – price that would leave the buying division no worse off if an input were purchased from an internal division than if the same good were purchased externally If max. price is higher than min. price, two divisions SHOULD transfer If max. price is lower than min. price, two divisions SHOULD NOT transfer...
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