AC 505- MANAGERIAL ACCOUNTING WORKSHEETS COST OF GOODS MANUFACTURED SCHEDULE Direct Materials: Raw Materials Inventory Add: Purchases of raw materials Raw Materials Available for Use Deduct: Raw Materials Inventory Raw Materials Direct Labor Manufacturing Overhead: Rent on Facilities Insurance Indirect Labor Utilities Maintenance, factory Depreciation, factory Total Overhead Costs Total Manufacturing Costs Work in process inventory Deduct: Work in process inventory Cost of Goods Manufactured COST OF GOODS SOLD Beginning Finished Goods Inventory Add: Cost of Goods Manufactured Cost of Goods Available for Sale Deduct: Finished Goods Inventory, Cost of Goods Sold INCOME STATEMENTSales Less: Cost of Goods Sold Gross Margin Less: Administrative Expenses Less: Selling Expenses Net Operating Income JOINT PRODUCT COSTING Units Price Total Product A (# of Units) x Unit Price = $$$ Product BTotalRevenue, if processed further Less: Additional Opportunity Costs Total Cost of Processing Net Disadvantage of Processing Alternative Method: Revenue if processed further $$$$Revenue if Sold As Is - Incremental Revenue Incremental Cost of Processing - Incremental Disadvantage $$$$MAKE/BUY DECISION Make Buy (Seller Offering Goods) Direct Materials Direct Labor Variable Overhead (% x #) Total Cost to Make Cost To Buy Cost Saving FLEXIBLE BUDGETING Original Budget Actual Costs Direct Materials Direct Labor Variable Overhead Fixed Overhead Total (Note: Divide Units by each of the above to get Unit Price) Cost Formula: Total Cost = Variable Cost + Fixed Cost (SP x SQ) (AQ x SP) (AQ x AP) (2-3) Original Budget Flexed Budget Actual (Units) (Units) Cost Variance Item (Always Given) (Always Given) (Price divided by Units = Unit Price) (Note: Subtract Flexed Budget # from Actual # to get Variance) CONTRIBUTION MARGIN INCOME STATEMENTSales (Unit Price x Units Sold) Variable Costs: Manufacturing (Unit Cost x Units Sold) Selling and Administrative (Unit Cost x Units Sold) Contribution Margin Fixed Costs Manufacturing Selling and Administrative Operating Income (TRADITIONAL) Sales Cost of Goods Sold Variable: Fixed Gross Profit Selling and Administrative Expenses Variable Fixed Operating Income NET PRESENT VALUE FOR LEASE/BUY METHODS Note: Annual Cash Inflows: (use 14 C-4 table) Single Years: (Use 14 C-3 table) Item Year Amt of Cash Flows PV Factor PV of Cash Flows (NOW) (%) (Note: NOW values are always in deficit) MACRS and NET PRESENT VALUE (NET PRESENT VALUE) (1) (2) ITEM YEARS AMOUNT TAX EFFECT CASH FLOWS PV FACTOR PRESENT VALUE (1 - TAX RATE) (1 X 2) MACRS TABLE COST OF EQUIPMENT MACRS% DEP. x (%) = ($$) x TAX RATE = CASH FLOWS x PV FACTOR = PRESENT VALUE (Note: Use 14 c-3 table) EVALUATING TWO PROJECTS - PROFITABILITY INDEX & PAYBACK PERIOD YEAR CASH FLOW x PV FACTOR = PV OF CASH FLOWS PRESENT VALUE = TOTAL PV OF CASH INFLOWS - INITIAL INVESTMENT = NET PRESENT VALUE PROFITABILITY INDEX = PV OF CASH FLOWS DIVIDIED BY INITIAL INVESTMENT PAYBACK PERIOD = INITIAL INVESTMENT DIVIDIED ANNUAL CASH INFLOWS VARIABLE COSTING AND FULL-ABSORPTION FORMATS VARIABLE COSTING - CONTRIBUTION MARGIN Year 1 Year 2 Sales (Volume x Selling Price) Variable Cost of Goods Sold Beginning Inventory Current Period Manufacturing Costs (Production Volume x Unit Price) Less Ending Inventory Variable Cost of Goods Sole Total Contribution Margin Fixed Manufacturing CostsNonmanufacturing Costs Operating Profits FULL ABSORPTION COSTING Year 1 Year 2 Sales Full Cost of Goods Sold Beginning Inventory Current Period Manufacturing Costs Less Ending Inventory Full Absorption Cost of Goods Sold Gross MarginNonmanufacturing Costs Operating Profits BREAK-EVEN ANALYSIS Units %Sales Less: Variable Costing Contribution Margin Less: Fixed Costs Net Income (Note: To determine Unit Price - Number of Units divided by Price for each variable/To determine Percentage - Sales Unit divided by Variable Cost Unit) Break-even in Units Sold = Fixed Expenses divided by Unit Contribution Margin Break-even in Sales Dollars = Fixed Expenses divided by Contribution Margin Ratio SELLING AND ADMINISTRATIVE BUDGET Month 1 Month 2 Month 3 Budgeted Sales in Units Variable Selling and Admin (Unit) x x x Selling/Admin Expense Add: Fixed Selling/Admin Total Selling/Admin Expense Less: Depreciation Cash Disbursements for Selling/Admin Expenses MANUFACTURING OVERHEAD BUDGET Month 1 Month 2 Month 3 Budgeted Direct Labor Hours Variable MOH Rate x x x Variable MOH Add: Fixed MOH Total MOH Less: Depreciation Cash Disbursements for MOH FLEXIBLE BUDGET PERFORMANCE REPORT Budgeted: Actual: Cost Formula Actual Costs Budget Variance Overhead Costs Variable Overhead Costs (List as Given) Total Variable Overhead Costs Fixed Overhead Costs: (List as Given) Total Overhead Costs.