Accounting Exam 2

Throughput time (manufacturing cycle time) = (People Inspect, Machines Queue)

Process time + Inspection time + Move time + Queue time

Delivery cycle time =

Wait time + throughput time

Wait time

Elapsed time from order receipt to production start

Value added time is

Process time, ALL OTHER times are non-value added

Manufacturing Cycle efficiency =

Value-added time (Process time) ÷ throughput (manufacturing cycle) time

Budgeted purchases =

Budgeted sales units + desired ending inventory − beginning inventory

OEE (overall equipment effectiveness) =

Utiliazation rate x efficieincy rate x quality rate

Utilization rate =

Actual run time/machine available time

Efficiency rate =

Actual run rate/ideal run rate

Quality rate =

Defect free output/total output

Categories of a balanced scorecard (12)

Financial

Customer

Internal business practices

Learning and growth

Costs of quality (12)

Prevention

Appraisal

Internal failure

External failure

Variable costing PRODUCT costs are

Only costs that vary with output

Vriable costing PERIOD costs are

FIXED OVERHEAD, selling and administrative expenses

Absorption costing product costs

ALL manufacturing costs regardless of whether they are fixed or variable (fixed MOH divided per unit).

CVP analysis formula (6)

Segment margin (segment operating income) (6): the margin available after a segment has covered all of its own fixed costs.

Segment contribution margin - traceable FIXED COSTS

Components of variable costing income statement (6)

Sales - variable expenses = CONTRIBUTION MARGIN - fixed expenses= NET OP INCOME

Dollar sales for company to break even formula (6)

Segment break even formula (6)

Master budget (8) S P D D O E S

👉 “Smart People Do Daily Organized Exam Study”

Consists of multiple separate and INDEPENDENT budgets

1. Sales Budget and schedule of cash collections.

2. Production Budget or Purchases Budget

3. Direct Materials Budget

4. Direct Labor Budget

5. Overhead Budget

6. Ending Finished Goods Inventory Budget

7. Selling and Administrative Expense Budget

Production budget formula

BUDGETed sales + desired ENDing - BEGinning

Sections of the CASH budget

1. Cash Receipts

2. Cash Disbursements

3. Cash excess or deficiency

4. Financing section

BE in unit sales: