Accounting Final (23, 24, 25, 12)

Controllable Margin

Contribution Margin - Controllable Fixed Costs

Cost Center

A responsibility center that incurs costs but no profit (only controllable costs on report, no distinction between variable and fixed)

Profit Center

Incurs costs but also generates profits (most direct costs controllable, most indirect fixed costs not controllable)

Investment Center

Incurs costs and generates investment income, manager is tested using ROI

ROI

Controllable Margin / Average Total Assets

Cash Payback Period

Initial Investment / Net Annual Cash Flow

Net Present Value

Discounted Cash Flows - Initial Investment

Profitability Index

Present Value of Net Cash Flows / Initial Investment

Internal Rate of Return

Initial Investment / Net Annual Cash Flow = Table Score

Annual Rate of Return

Expected Annual Net Income / Average Investment