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Mas Summary PDF
Mas Summary PDF
16
Batch 1 r
1. Cost Behavior Analysis 14 i
2. Cost Valuation Profit Analysis s
3. Absorption & Variable Costing 12 e
_______
Total Cost = F x C + VC 10 run
1 2 3 4
y= a + bx
Least-Square
Regression Method
Dependent Y intercept Slope Independent
Variable (Fixed Cost) Variable ∑y=na+b∑x
∑ x y = a ∑ x + b ∑ x2
Slope (b) = rise = ∆Y
run ∆X
CM = F x C + P x = F x C (increase)
CM/unit
S
-VC x = unit increase
CM
-F x C
P ―Before interest & taxes‖
CM/unit [ ] [ ]
S CM/S x MS/S = P/S S
CMR x MS = P
Page 1 of 50
Discussion: Sales Mix
BEP units = F x C
WtdAvg CM/Unit *
products
x y
CM/unit xxx xxx
Sales Mix Ratio x% x%
_____________
Wtd.Avg.CM/Unit xxx + xxx = xxx
Note: Cetiris Paribus unless otherwise stated, other ―things‖ are constant
MAS
BES = F x C
CMR
2. CMR = F x C = ∆F x C S = FxC
BES ∆ BES CMR- ROS
3. CMR = P = ∆ P
MS ∆ MS
Note: this can be use only
if the profit is a percentage.
Page 2 of 50
P>S
DM <
DL ―Variable AY xxx E>B
VPOA Cost‖ VY xxx <
FFOA Sales ∆Y xxx A>V
TMC CGM (CGS) <
GP
WIP FGI ∆Y = ∆ Inventory x FFOA/unit
- (Ope. Exp)
Period Cost
(fully expense)
―Variable Costing‖ NY (P vs S) (E vs B)
FFOA Dep‘n.
(factory equipment) Absorption Costing - PRODUCT COST
AC – DC
Page 3 of 50
Batch 2 Special Order [refer to your formulas]!!
4. Relevant Costing
5. Budgeting
6. Standard Costing Continue or Discontinue
MS – 04 Sales
Make or Buy VC
CM
Note: Add lang ng add!! - F x C (Direct) Traceable (+) => Continue
Segment Margin segment
- F x C (Indirect) Common (-) => Shutdown
Make Buy Profit segment
DM xxx
DL xxx
VPOA xxx
FFOA xxx xxx* BEP = F x C
HC xxx xxx* CM/unit
*AC xxx
*OC xxx Note: Note:
Income sacrifice or SD point > continue
forgone if on make! Produce
CM/hour or
[scarce resources]
Page 4 of 50
0 - WC
CL
Sell or Process Further 1. C
L NCL
Split - off Point
M
A NC E
F0 - COC
0
I
Joint Process L CB
O
―Joint Cost‖
FPC
1. Collection Platform!
xxx xxx
*Best Product
Combination*
MS – OS – Budgeting!!
Quantitative
Budget = PLAN
MASTER BUDGET
Operating – IS
Financial – BS
Production Budget
Page 5 of 50
MS: 06 Standard Costing FOH Vminus = AC–SC = AFOH–SFOH
[Refer to your summary]
2 way 3 way 4 way
PLAN = BH = BFOH x
OPERATION =AH = BAAH
CONTROLLING =SH = BASH
y = a + b‗x‘
Page 6 of 50
Capital Budgeting
Discounted Techniques
2.1
PVF for IRR = Net Investment Cost
Net Cash Inflows
Microeconomics
Page 7 of 50
Batch 3
7. Responsibility Accounting
8. Balance Score Card & Accounting Based Cost
9. Quantitative Techniques
Page 8 of 50
MS-12 Discussion [Gross Profit Variance Analysis]
xxx
SVV SPV Price
2009 QF PF 2010 Factor
Sales xxx * xx * xx = xxx
GP xxx xxx
CVV xxx CPV
Volume factor Cost Factor
PART 2: MS-07: Transfer Pricing:
[Upper Limit]
1. Maximum transfer Price = Cost of Buying from Outside Suppliers
(Selling Price-SP)
[Lower Limit]
2. Minimum Transfer Price = Variable Cost per Unit + Lost CM per Unit on Outside Sales.
Page 9 of 50
MS: 08 Activities Based Costing & Balance Score Card
1. Perform process Value analysis (Value Added Activity & Non Value Added Activity)
2. Identify Cost Drivers (Activities) Cost Pools & Activity centres.
3. Calculate Predetermined Overhead Notes
*Predetermined OH Rate = Est. OH COST
Est. Activity level
4. Allocate the OH Cost to the products on the basis of predetermined rates.
Delivery Cycle Time = wait time + [Process time + Inspective Time + Move Time +‖Queue Time‖
=‖Manufacturing Cycle‖ (Throughput Time)]
Productive = --
--
B
Events : A, B, C, D A D
Activities: A-B, B-D, A-C, C-D
Parallel : A-B & A-C, B-D & C-D
C
Series: A-B & B-D, A-C &C-D
Paths : A-B-D, A-C-D
PROBABBILITY ANALYSIS
(Mean) Mode]
Everything! (Anything)
Note:
The commodities average time per units is reduced by certain percentage each time the
production doubles!
Incremental unit time (to time produce the last unit) is reduce when production doubles.
Inventory Models:
EOQ = √ or √
Ordering Cost = D
EOQ
Lead Time: period from the time an order is planed until such time the order is received.
Page 12 of 50
Continuation: MS-09
Linear Programming
1. Objective Function
2. Identify Constraint Function
3. Optimal/Product Mix
a. Substitution
b. Test Coordinates
Cash
Cash in xxx 2.
- Cash out (xxx) A. Operating Income (EBIT) xxx
Net Cash Flows Interest % (xxx)
EBT xxx
Tax % (xxx)
NIAT xxx
Preferred Div (amount) (xxx)
NI – C/S xxx
Page 13 of 50
2. Cost & Capital
Borrowed CA
L Interest 5% x 80% = 4%
Capital
A NCA E Dividends 10% x 20% = 2%
Inventory 6%
Capital
1. MV over BV
2. Effective Rate over Nominal Rate
Sources:
Debt: Yield Div Yield = Div/Share
Equity: MP/Share
(P/S)
(C/S) WACC = is minimum acceptable rate of return, desirable rate of return
= Rf+b(Rf-km)
Page 14 of 50
Capital Budgeting with consideration of Time 1. IRR to solve
Value Method Cost of Investment
Ordinary PVF % =
NPV = PV of Cash Inflow – PV of Cash Annual Cash Flow
Outflow
PI = PV of Cash Inflow ÷ PV of Cash 2. Trial and Error on choices available
Outflow
IRR = PV of Cash Inflow = PV of Cash Outflow
Decision Rules
IRR = NPV = O
PB pd ≤ 1. Industry Std
*Computation of Effective Rate 2. life ÷ 2
PB pd =
Payback Period
NPV ≥ 0
life <
1. PB pd ≤
PI ≥ 1
2
<
2. Cash Inflow – Uniform
IRR > Cost of Capital
↑IRR = ↓ PVF <
↓IRR = ↑ PVF *Discount Methods
Page 15 of 50
MS: II Financial Management
Page 16 of 50
Accounts Receivable Management 6. Manufacturing Resource Planning
(Various Areas)
1. Credit Selection and Standards 7. Enterprise Resource Planning (All
2. Credit Terms Functional Areas)
3. Collection and Monitoring Program 8. ABC Classification System
Page 17 of 50
Factors of Considerations in Selecting Sources
of Short-Term Funds
Discounted Discounted
Cost Sources of Short-
Interest Interest
Term Funds
Cost = Cost =
Availability - Unsecured FV – Interest FV – Interest – CB
Credits
Influence - Secured Loans
Requirement - Banking
Credits Interest + Issue Cost
Cost of Commercial Paper =
FV – Interest-Issuance Cost
Cost of Short-Term Credit
Long-Term Financing Decision
- Cost of Trade Credit with Supplier
L
Cost =
Discount Rate
100% - DR %
x
360
Page 18 of 50
Concept of Leverage
DOL = CM or DL = ∆% in EBIT
EBIT ∆% in Sales
DFL = EBIT or DPL = ∆% in EPS
EBIT-Interest ∆% in EBIT
Page 19 of 50
Financial Statement Analysis
Fixed Assets
Fixed Assets to Total Equity =
Total Equity
Net Sales
Sale to Fixed Assets =
Fixed Assets (NET)
CS SHE
B.V/ Share – CS =
CS Outstanding
NIAT
Times Preferred Div. Earned =
Preferred Dividend
Total Assets
Capital Intensity Rate =
Net Assets
Page 20 of 50
Test of Over-All Short-term SOLVENCY or Short-term Financial Position
Page 21 of 50
(personal notes of grr-quash2)
4. Managerial Accounting
9. Pricing Decisions
11. Budgeting
13.Capital Budgeting
10. Hybrid & Donatives Security (Chapter 16) [including Chapter 17]
Page 22 of 50
11. Leverage & Capital Structure ( Chapter 12)
COST-VOLUME-PROFIT &
5 BREAK-EVEN ANALYSIS
Less: Cos
Gp
Profit / less
Y = a + bx
X = Number of Units
Sales
Contribution Margin
- Fixed Cost
Profit
Page 23 of 50
CONTRIBUTION MARGIN OR FORMULA APPROACH
Sales
Sales
CM Ratio
Page 24 of 50
Margin of Safety = Actual or - Break – even Sales
Planned sales
Planned Sales
= Margin of Safety
PROCEDURE:
SP
CMR
1 2 3 4
FC = AFC = CM = ACM = F = PR
X = X =
Page 25 of 50
7 VARIABLE & ABSORPTION COSTING
E = B Total xxx
Page 26 of 50
8 Different Cost Analysis
B. Setting of Criteria
1. Make or Buy
Solution:
DM xxx
DL xxx
VFOH xxx
Difference xxx
Of making [“Set“]
Page 27 of 50
Less: Contribution Margin To be Lost by reducing sales ( xxx )
To regular Costumers
Make Buy
VMC PP
AC FC / SAVINGS
OC
XXX XXX
ADVANTAGE / DISADVANTAGE
CONTINUE OR DISCONTINUE
Continue Discontinue
Sales in Units
Page 28 of 50
Profit / less per Unit if processed further xxx
RESOURCES PRODUCT
A B C
Page 29 of 50
Standard Cost & Variance Analysis
AP x AQ AQ x SP SP x SQ AR x AH AH x SR SR x SH
Material Price Variance Material Usage Quantity Labor Price Variance Labor Usage Quanity
Variance Variance
Total Material Variance = MPV + MUQY Total Labor Variance = LPH + LQV
Page 30 of 50
FOH Variance Analysis FOH Variance [AFOH-SFOH] = Total Variance
Page 31 of 50
I. FINANCIAL STATEMENT ANALYSIS
VERTICAL ANALYSIS
Liquidity Ratio
1. Current Ratio = Current Asset
Current Liability
ACTIVITY RATIO
SOLVENCY RATIO
PROFITABILITY RATIO
2. OI Ratio = OI
Sales
5. Return on = NIAT
Sales Sales
6. Return on = NIAT
Asset Average Asset
7. Return on = NIAT
Equity Average Equity
Page 33 of 50
MARKET TEST
(2) —— —— (3)
M ⁄ E
DU POINT SYSTEM
3 → 4↑
ROS ETO
Page 34 of 50
GROSS PROFIT VARIANCE ANALYSIS
GP xxx xxx
Volume Variance
Page 35 of 50
III. Decisions Making & Evaluation System
Make or Buy
Page 36 of 50
Continue or Discontinue Operating a Business Segment
Continue or Discontinue
CM xxx —○—
FC (xxx) (xxx)
-FC
Profit
Profit xxx
Page 37 of 50
Product Combination / Utilization of Scarce Resource
Steps:
ECQ= √
Conversion Cost =
Powerful Tool
Page 38 of 50
Additional Profit Contribution from Sales
Page 39 of 50
Credit Monitoring
Float
1. Mail Float
2. Processing Float
3. Clearing Float
Cash Concentration
Resource Invested
Inventory Management
Page 40 of 50
*Order Cost =Ox
*Carrying Cost = C x
*EOQ =√
PR = C =
PR CMR
= x MSR
5. Indifference Point:
FINANCE 3, 4, & 5
Chapter 3
Chapter 4
4.3 Amounts
REFER TO TABLE!!!
1.risk averse
2. risk indifferent
Page 42 of 50
3. risk seeking
CHAPTER 6 & 7
Steps :
1. Proposal Generation
2. Review & Analysis
3. Decision Making
4. Implementation
5. Follow -Up
Chapter 14:
Page 43 of 50
Chapter 15 Margin Current Liabilities
Cash Discount ↓
F/S Analysis
Note:
Cash Flow
Technique:
Debt ratios
Page 45 of 50
Cost and Cost Concept
I. Cost Classification
A. Function
1. Manufacturing
DM + DL + FOH = TMC
DC CC
2. Commercial ( Non-Manufacturing )
B. Behaviour
1. Variable Cost
2. Fixed
3. Hybrid/ Mixed
slope
VC per Activity
NOTE: The independent variable is the point where to determine the points to be used.
Page 46 of 50
2. Regression or Method of Least Squares
∑ x y = a ∑ x + b ∑ x2
[ ∑y = an + b ∑ x x
AQ x AP
MYU Standard Quantity x Standard Mix x Standard
Material Price Variance Price
AQ x SP
TA/ASIC
⇨ [―TAQ‖ x Average SP
SQ x Average SP
Page 47 of 50
NOTE: Average Selling Price = SP/unit of product x Mix/product
FOH Variance:
Cost Formula:
Y = FC + Variance/unit (x)
Other Formulas:
Page 48 of 50
Responsibility Accounting
- Systems of Accounting Performance
Responsibility Centre
Variance
Cost – Cost
Variance – AR-BR
Revenue – Revenue
Segment I/S
1. Segment I/S
2. ROI Investment – revenue, cost, investment
3. RI
4. EVA – Economy Value Added
STEPS:
Page 49 of 50
Optional Safety Stock
Usage
Probability
Spontaneous Liability
Illustration
5/10; n/10
0 10 20 30 40
2,000 interests
Interest = P x R x T
= 24.49 %
Page 50 of 50