Studied by 2 peopleCh 22: What is CIPIF?
Customer, Internal Processes, Innovation/Learning, and Financial
Customer:
Customer satisfaction rate
# of new customers
Time to fill orders
% of sales returned
Internal Processes (products)
Defect rates
Cycle times
# of new products
# of new patents
Warranty claims
Innovation/Learning (employees)
Employee satisfaction
Employee turnover rate
$ spent on training
Financial
Target income
ROI
Profit margin
Residual income
Investment turnover
What is the ROI formula?
income / avg assets
What is the Residual Income formula?
Residual Income = income - target income
How do you know if a variance is favorable?
Favorable (f): increases operating income |
Actual revenue > Budgeted revenue Actual expense < Budgeted expense |
How do you know if a variance is unfavorable?
Unfavorable (u): decreases operating income |
Actual revenue < Budgeted revenue Actual expense > Budgeted expense |
How do you find the budgeted production?
Budgeted production = - (less estimated income/beginning inventory) + (add desired inventory)
How do you find budgeted sales?
Budgeted sales = (Sales price per unit x budgeted production)
Ch 20: Ending inventory of next month is multiplied with % desired inventory
Example: to find January’s budgeted production you would multiply that % of desired inventory w/ feb’s sales
Then in feb, you would take the ending inventory of last month to subtract as beg inventory
Ch 21: a cost variance is favorable when
actual cost < standard cost
Ch 21: a cost variance is unfavorable when
actual cost > standard cost
Ch 21: Total cost variance formula
Total Cost Variance = Price Variance + Quantity Variance
Example = 9000F + 5000U = 4000 total
Manufacturing plants are considered cost centers because
they control ONLY costs
Profit center controls..
generating revenue and controlling costs
When operating at full capacity…
The transfer price is always market price
Operating less than full capacity…
Transfer price is negotiated between variable cost per unit and market price per unit
Operating less than full capacity = excess space!
Is depreciation subtracted or added?
subtracted (less)
Of the remaining sales means..
subtracting the cash percentage
Example 20% of it’s merchandise is used in cash
1-0.20 = 80%
allocate maintenence costs to assembly
price / sum of allocation base
(T/F) cash collections ARE NOT cash sales
true
Cash sales are immediate cash inflows so…
cash collections = accounts recievable
Note
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