7/26/2019 Actg Cheat Sheet
2/3
Decisions
Adding/DroppingSegments Make/Buy ConstrainedResource
SpecialOrders
Sell Processurt!er
C o n t ri " u t io n M a r g i n
S o l u ti o n
C o n t ri " u t io n m a r g i n l o s t i # d i g i ta l
$ a tc ! e s a r e d r o p p e d %& ' ' ( ' ' ' )*
+ e s s # i, e d c o s t s t ! a t c a n " e a o i d e d
S a l a r y o # t! e l i n e m a n a g e r . ' ( ' ' '*
A d e r t i s i n g / d i r e c t 0 ' ' ( ' ' '
R e n t / # a c t o r y s p a c e 1 ' ( ' ' ' 2 3 ' ( ' ' '
4 e t d i s a d a n t a g e % 5 ' ( ' ' ' )*
C o m p a r a ti e 6 n c o m e A p p r o a c !
S o l u t i o n
7 e e p
D i g i t a l
8 a t c ! e s
D r o p
D i g i t a l
8 a t c ! e s D i # # e r e n c e
S a l e s 9 ' ' ( ' ' '* -* % 9 ' ' ( ' ' ' )*
+ e s s a r i a " l e e , p e n s e s : -
M a n u # a c t u r i n g e , p e n s e s 0 2 ' ( ' ' ' - 0 2 '
( ' ' '
S ! i p p i n g 9 ( ' ' ' - 9 ( ' ' '
C o m m i s s i o n s 1 9 ( ' ' ' - 1 9 ( ' ' '
; o t a l a r i a " l e e , p e n s e s 2 ' ' ( ' ' ' - 2 ' ' (
' ' '
C o n t r i " u t i o n m a r g i n & ' ' ( ' ' ' - % &
' ' ( ' ' ' )
+ e s s # i, e d e , p e n s e s :
< e n e r a l # a c t o r y o e r! e a d 3 ' ( ' ' ' 3 ' ( '
' ' -
S a l a r y o # l i n e m a n a g e r . ' ( ' ' ' - . ' ( ' '
'
D e p r e c i a t i o n 9 ' ( ' ' ' 9 ' ( ' ' ' -
A d e r t i s i n g / d i r e c t 0 ' ' ( ' ' ' - 0 ' ' ( ' '
'
R e n t / # a c t o r y s p a c e 1 ' ( ' ' ' - 1 ' ( ' ' '
< e n e r a l a d m i n = e , p e n s e s & ' ( ' ' '
& ' ( ' ' ' -
; o t a l # i , e d e , p e n s e s 5 ' ' ( ' ' ' 0 5 ' ( ' ' '
2 3 ' ( ' ' '4 e t o p e r a t n g o s s % 0 ' ' ( ' ' ' )* % 0 5 '
( ' ' ' )* % 5 ' ( ' ' ' )*
C o s t
P e r
> n i t C o s t o # 2 ' ( ' ' ' > n i t s
M a k e B u y
O u ts id e p u rc ! a s e p r i c e * 2 9 * 9 '' (' ' '
D i r e c t m a te r i a l s .* 0 ? ' ( ' ' '
D i r e c t l a " o u r 9 0 ' ' ( ' ' '
V a r i a " l e o e r ! e a d 0 2 ' ( ' ' '
D e p r e c i a t i o n o # e @ u i p = & -
S u p e r i s o r s s a l a r y 2 5 ' ( ' ' '
< e n e r a l # a c t o r y o e r! e a d 0 ' -; o t a l c o s
t & ' & 5 ' ( ' ' ' 9 ' ' ( ' ' '
6 n c r e a s e i n r e - e n u e %& ( '' ' B * 0 ' ) &
' ( ' ' '*
6 n c r e a s e i n c o s ts %& ( ' ' ' B * ? - a r i a " l
e c o s t) 2 5 ( ' ' '
6 n c r e a s e i n n e t o p e r a t i n g i n c o m e 3 ( ' '
'*
A n a l y s i s o # S e l l o r P r o c e s s u r t ! e r
P e r + o g
+ u m " e r S a $ d u s t
S a l e s a l u e a # t e r #u r t ! e r p r o c e ss in g 2 1'*
9 '*S a le s a l u e a t t! e sp li t - o ## p o i n t 0 5 ' 5
'
6 n c r e m e n t a l r e e n u e 0 & ' 0 '
C o s t o # # u r t! e r p r o c e s s i n g 9 ' 2 'P r o # i t
% lo s s ) #r o m # u r t! e r p r o c e s s i n g ? '* % 0 '
)*
P r o d u c t
0 2
S e l l i n g p r i c e p e r u n i t * 3 ' * 9 '
+ e s s - a ri a " l e e , p e n se s p e r u n i t & 3
& 9
C o n t ri " u t i o n m a r g i n p e r u n i t 2 5* 0 9*C u r
r e n t d e m a n d p e r $ e e k % u n it s ) 2 (' '' 2 ( 2 '
'
C o n t r i " u t i o n m a r g i n r a t i o 5 ' & '
P r o c e s s in g t i m e r e @ u i r e d
o n m a c ! i n e A 0 p e r u n i t 0 = ' ' m in = ' = 9 '
P r o d u c t
0 2
C o n tr i " u ti o n m a rg in p e r u n it * 2 5 * 0 9
; im e r e @ u i r e d to p r o d u c e o n e u n it 0 =' ' m i
n = ' = 9 '
C o n t r i " u t i o n m a r g i n p e r m i n u te 2 5* &
'*
C h a i r s T a b l e s
S e l l i n g p r i c e 8 0$ 4 0 0$
V a r i a b l e c o s t 3 0 2 0 0
C o n t r i b u t i o n m a r g i n 5 0$ 2 0 0$
B o a r d f e e t 2 1 0
C M p e r b o a r d f o o t 2 5$ 2 0$
r o d u c t i o n o f c ! a ir s " 0 0B o a r d f e e t r e # u
i r e d 1 2 0 0
B o a r d f e e t r e m a i n i n g 8 0 0B o a r d f e e t p e r
t a b l e 1 0
r o d u c t i o n o f t a b l e s 8 0
voidable #ixed expenses . advertising and salaries o! product
line managers&
/on-avoidable . depreciation on e0uipment (sun$ cost but still
traceable", common allocated costs,
general administrative
! 1ost CM 2 voidable #ixed Costs do not discontinue
le, Budgeting : 'etermine rate and multiply across 3exible
budgets, compare the two determine variances
Reporting or Control
4raceable costs vs& common costs
egment Margin . CM 4raceable #ixed Costs
Common costs should not be allocated to segments
R!%= !perating %nco&e
Average !perating Assets=Margin'Turnover=
%nco&e
%nvest&ent
Margin=!perating %nco&e
Sales Turnover=
Sales
Average!perating Assets
Resi(ual %nco&e=ivisional #et inco&e(erest C)arge( '
%nveste( Capital)
Resi(ual %co&e=!perating %nco&e(Average !p Assets' Min
Re*uire( Rate of Return)
7/26/2019 Actg Cheat Sheet
3/3
0=SalesBudget 3=Direct+a"ourBudget 0'= Cas!Budget
5udgetedalesin6nits x 7roduction(#rom7roduction5udget" x
5eginningCash5lance
ales7rice7er 6nit y 1abor 8our per unit y dd9
CashCollections
;otalBudgetedSales xy +a"orEourRe@uired xy ;otal
Cas!A-aila"le:uaranteed1abor 8ours 1ess9Cash'isimbursements
2=AccountsRecei-a"les%Cas!Collection) +a"orEoursPaid
'irectMaterial ('M 5udget"
ccounts;eceivable(o! ???? Varia"leM=O= Costs xy #inancing;otal
Cas!Collection #ixedM&+& Costs 5orrowing
;otalM=O=Costs ;epayments
&=ProductionBudget pril May 1ess9/onCash*xp('epreciation"
nterest
5udgetedales(#romales5udget" Cas!Disim"ursementorMO
;otalinancingdd9'esired*ndingnventory =A,AAA FndingCas!Balance
;otal4eeds ?=Fndingins!ednit Gty Cost ;otalRe@uiredProduction
'irectM aterial('M 5udget" B =A BA
'irect 1abor('l5udget"
5=DirectMaterialsBudget Manu!acturing+verhead(M+ 5udget" (;ate -
4otal M+ #oruarter4otal1abor8oursre0"7roduction (#rom 7roduction
5udget" x 4otal Costs per unit p
Material 7er 6nit y Budgetedinis!edo!??? ;otalSHACosts
y>o! ???? 1ess9 /on Cash *xp
('epreciation"May7urchases(#rom'M 5udget"
Cas!Disim"ursementorSHA
x>o!???y>o! ????
;otalCas!Payments
R o y a l C o m p a n y
B u d g e t e d 6n c o m e S t a te m e n t
o r t! e ; ! r e e M o n t ! s F n d e d I u n e &
S a l e s %0 ' ' ( ' ' ' u n i ts J * 0 ' ) 0 (*
C o s t o # g o o d s so ld % 0 '' (' '' J * 5= . .)
< r o s s m a r g i n
S e l li n g a n d a d m i n is tr a ti e e , p e n s e s
O p e r a ti n g i n c o m e
6 n te r e s t e , p e n s e
4 e t i n c o m e *
R o y a l C o m p a n y
B u d g e t e d B a l a n c e S ! e e t
I u n e & '
C u r r e n t a s s e t s
C a s ! *
A c c o u n t s r e c e i a " l e
R a $ m a te r i a l s i n e n to r y i n i s ! e d g o o d s i
n e n t o r y
; o ta l c u r r e n t a s s e ts 0
P r o p e r ty a n d e @ u i p m e n t
+ a n d
F @ u i p m e n t &
; o ta l p r o p e r t y a n d e @ u i p m e n t 5
; o t a l a s s e t s 9*
A c c o u n ts p a y a " l e *
C o m m o n s ! a r e s 2
R e ta i n e d e a r n i n g s &
; o t a l l i a " i l i t i e s a n d e @ u it i e s 9*
ariance Oer!eadVariances
aterialVariances Varia"leM=O=Variances
aterial7rice)ariance.(7-7"
)ariableM&+&pending)ariance.8(-"
aterial uantity)ariance.7(-" )ariableM&+&
*!!iciency)ariance.(8-
8"epricevarianceiscomputedontheentire0uantitypurc!ased%i,edOer!eadVariances
e0uantityvarianceiscomputedonlyonthe0uantityused=
5udget)ariance.ctual #ixed+verheadncurred- #ixed+verhead5udget
a"orVariances )olume)ariance.#ixed+verhead5udget-
#ixed+verheadpplied
borate)ariance.8(-" #ixed+verhead5udget .'8D#('89'enominator
8ours; #- td#ixed+verhead
bor*!!iciency)ariance.(8- 8" #ixed+verheadpplied.D#(-
tandard8oursallowed;#- asabove"
