Mngrl Acc Final

• Variable Costing


  all variable manufacturing costs (direct & indirect) are included as inventoriable costs
• Absorption costing


  all variable and fixed manufacturing costs are included as inventoriable costs
• Variable Costing Setup

  Revenues

  - Variable Manufacturing Costs

  - Variable Operating Expenses

  Contribution Margin

  - Fixed Manufacturing Costs

  - Fixed Operating Expenses

  Operating Income
• Absorption Costing Setup

  Revenues

  - Variable Manufacturing Costs

  - Fixed Manufacturing Costs

  +/- Production Volume Variance

  Gross Margin

  - Variable Operating Expenses

  - Fixed Operating Expenses

  Operating Income
• Theoretical Capacity

  • Supply-based
  • Absolute maximum efficiency possible, allows for no slowdowns
• Practical Capacity

  • Supply-based
  • Maximum efficiency w/ unavoidable stoppage time (i.e. holidays, repairs, maintenance)
• Normal Capacity

  • Demand-based
  • Average demand over a period of time
• Master Budget Capacity

  • Demand-based
  • Specific budgeted demand over a specific period of time (Jan-Jun 8000u/month, Jul-Dec 10000u/month)
• Cost Function


  Y = a + bX

  Y = total cost (depends on X)

  a = fixed cost (constant)

  bX = variable cost

  b = rate

  X = driver (independent variable)
• High-Low Method


  Cost/driver

  Highest driver - lowest driver = b

  H/L cost = a + b(H/L driver)
• Incremental Learning Curve


  unit # | Single Time | Total Time

  Single time x learning curve percentage = next single time

  Single time + single time... = Total time
• Cumulative Average Learning Curve


  unit # | Single Time | Average Time | Total Time

  Average time x learning curve percentage = next average time

  Average time x unit # = total time
• Regression Analysis

  Coefficients*

  Y = constant + (X coefficient)X
• Relevant costs/revenues


  expected future costs/revenues
• Special Order

  Relevant revenues - relevant costs

  Selling Price/revenues

  - direct materials

  - direct labor

  - variable OH

  - fixed OH

  compare contribution margins/OI
• Make vs Buy

  add relevant costs

  Direct materials

  + direct labor

  + variable OH

  + fixed OH

  Total cost

  compare TC
• Production Volume Variance


  (Budg production - actual production) x FMC/u