BUS-187 Exam 4

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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)
Budgeted Overhead Costs ÷ Direct Labor Hours
Predetermined Overhead Rate x Standard Hours Allowed
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
 Author: Anonymous ID: 56221 Card Set: BUS-187 Exam 4 Updated: 2010-12-15 16:09:50 Tags: Accounting Folders: Description: BUS-187 Show Answers: