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# Unit IV

### Accounting 212

Term | Computation |
---|---|

Break-even point in units | Fixed Costs/Contribution Margin per unit |

Break-even point in dollars | Fixed Costs/Contribution Margin Ratio |

Contribution margin ratio | Contribution margin per unit/Sales price per unit |

Contribution margin income statement | Sales - Variable Costs = Contribution Margin - Fixed Costs = Net Income |

Production budget | Budgeted ending inventories (% of next quarter) + Budgeted sales for the quarter = Required units of available production - Budgeted beginning inventories = Units to be produced |

Cost Variance (CV) | Actual Cost - Standard Cost |

Actual Cost (AC) | Actual Quantity (AQ) x Actual Price (AP) |

Standard Cost (SC) | Standard Quantity (SQ) x Standard Price (SP) |

Quantity Variance | Actual Quantity (AQ) x Standard Price (SP) - Standard Quantity (SQ) x Standard Price (SP) |

Price Variance | Actual Quantity (AQ) x Actual Price (AP) - Actual Quantity (AQ) x Standard Price (SP) |

Labor Cost Variance | Actual Direct Labor Cost - Standard Direct Labor Cost |

Rate Variance | Actual Hours (AH) x Actual Rate (AR) - Actual Hours (AH) x Standard Rate (SR) |

Efficiency Variance | Actual Hours (AH) x Standard Rate (SR) - Standard Hours (SH) x Standard Rate (SH) |

Overhead Cost Variance (OCV) | Actual Overhead Incurred (AOI) - Standard Overhead Applied (SOA) |

Total Overhead Variance | Controllable Overhead - Volume Variance |

Controllable Variance | Actual Overhead Applied (given) - Applied Total Overhead (from flexible budget) |

Payback Period | Cost of Investment/Annual Net Cash Flow |

Accounting Rate of Return | After-tax Net Income / Average Amount Invested |

Average Amount Invested | Beginning Book Value + Ending Book Value / 2 |

Net Present Value | PV of Net Cash Flows - Amount Invested |

Created by:
Hugo Silver
on 2013-12-13