BUS-187 Exam 4

  1. Materials Price Variance (MPV)
    AQ(AP - SP)
  2. Materials Quantity Variance (MQV)
    SP(AQ - SQ)
  3. Total Materials Variance (TMV)
    (AQ x AP) - (SQ x SP)
  4. Labor Price Variance (LPV)
    AH(AR - SR)
  5. Labor Quantity Variance (LQV)
    SR(AH - SH)
  6. Total Labor Variance (TLV)
    (AH x AR) - (SH x SR)
  7. Total Overhead Variance
    Actual Overhead - Overhead Applied
  8. Actual Overhead
    Variable Overhead + Fixed Overhead
  9. Predetermined Overhead Rate
    Budgeted Overhead Costs ÷ Direct Labor Hours
  10. Overhead Applied
    Predetermined Overhead Rate x Standard Hours Allowed
  11. Make or Buy Analysis
    Costs ---> Choose Lower Amount and State the Net Income Effect

    Ex: DL, DM, Variable Manuf., Fixed Manuf., Purchase Price
  12. Reject or Accept Analysis
    Revenues - Costs ---> Choose Higher Net Income (or the one that isn't a Loss); State the Net Income Affect

    *Don't include fixed costs when operating at the same of full plant capacity. If fixed costs do change, include the difference in the change, NOT total fixed costs. If there are no changes to fixed costs, you should assume that it stays the same.
  13. Cash Payback Period
    Capital Investment ÷ Net Annual Cash Flow
  14. Net Annual Cash Flow
    Net Income + Depreciation Expense
  15. Depreciation
    Capital Investment ÷ # of Years
  16. Computation of Cash Payback Period
    Depreciation Expense - Cumulative Net Cash Flow; That Answer ÷ the Next Year's Net Annual Cash Flow = Decimal Amount. Add Decimal Amount for # Between the Years for Cash Payback Period
  17. Computation for Payback Period for Same Amount of Net Income
    Capital Investment ÷ (Total Net Income ÷ # of Years [Also Known as Net Annual Cash Flow]) = Cash Payback Period for Same Amount of Net Income
  18. Present Value
    Discount Factor x Net Annual Cash Flow
  19. Net Present Value
    Present Value - Capital Investment
  20. Net Present Value (Positive or Negative)
    Present Value of Net Annual Cash Flow - Capital Investment = Net Present Value; If the Net Present Value is positive, then the Investment should be made. If it is Negative, then the Investment should not be made.
  21. Retain or Replace Analysis
    Costs; Subtract Salvage Value from "Replace"; (Bracket) Costs in Net Income Effect, if larger than retain column. State the Net Income Effect
  22. Unfavorable
    Actual > Standard
  23. Favorable
    Actual < Standard
  24. Pick Smaller # for _________; Pick Larger # for ____ ________ / __________
    Costs; Net Income / Revenues
  25. Future Value of 1
    Table 1
  26. Future Value of an Annuity of 1
    Table 2; Use when period payments (receipts) are the same in each period.
  27. Present Value of 1
    Table 3; Use when periodic cash flows are uniform in each period. Ex.: Same Net Income + Depreciation (Net Annual Cash Flow)
  28. Present Value of an Annuity of 1
    Table 4; Use when periodic cash flows are not uniform in each period.
  29. Interest
    Principal (P) x Rate (i) = Time (n)
  30. Future Value
    p x (1 + i)n
  31. Present Value
    Future Value ÷ (1 + i)n
Card Set
BUS-187 Exam 4