1 C

2 D

3 A

4 C

5 C

6 D

7 D

8 A

9 C

10 B

11 D

12 B

13 D

14 B

15 D

16 A

17 B

18 C

19 D

20 D

1
P1 1 I II III

A 50 100 150
B 600 600 600
C 650 700 750

D 2 2 2

E 24 12 8

2 Specific Cost B&D

Constant
3 Specific Cost A&C
Directly Related to
Production
4 Inversely Related to E
Production
5 Cost Formula Y = 600 + 2(X)

6 Cost if 60 units 720 (600 + 60(2))

P2 1 Numerator 15.2-12.8 2400

Denominator 19-11 8
VC per Unit 300

2 Total Cost 12800

VC 300(11) 3300

FC 9500

Months 12

Total Annual FC 114000

3 Monthly Cost Y = 9,500 + 300x

Function

4 VC 300 * 12 3600

FC 9500
Y if 12 patients 13100

P3 A a

B b

C b

P4 April (400 hrs) June

Supplies V 260 (260-400) VC/U 0.65 455 (0.65x700)

Salaries F 300 300

Utilities M 291 453

851 1208

Cost Formula

Supplies V y= 0.65X (453-291)/(700-400) 0.54

Salaries F y= 300 y=a+bx 291=a+(0.54*400)

Utilities M y= 75 + 0.54x a=75

y=75+0.54x

(1,208-851)/ 1.19
(700-400)

y=a+bx 851=a+(1.19*400)

a=375

y=375+1.19x

2
 Month Machine Hours Total Overhead Cost xy
March 500 970 485,000 250,000

April 400 851 340,400 160,000

May 600 1089 653,400 360,000

June 700 1208 845,600 490,000

2200 4118 2,324,400 1,260,000

x y

4,118=4a+2,220b a=1,029.5-550b y=a+bx

4,118-2,200b=4a a=1,029.5-550(1.19) y=375+1.19x

a=1,029.5-550b a=375 y=375+1.19(550)

y=1,029.5

2,324,000=2,200a+
1,260,000b

2,324,000=2,200(1,
029.5-550b)
+1,260,000b

59,500=50,000b

B=1.19

1 C

2 A

3 A

4 D

5 D

6 D

7 C

8 A

9 A

10 C

11 A

12 A

13 B

14 D

15 D

3
1 1 Total /u % 1,501 u

Sales 37.5 25 100% 37.525 37.55

VC -15 -10 -40% -15.01 -15.02
CM 22.5 15 60% 22.515 22.53

FC -15 -10 -40% -15 -15

Profit 7.5 5 20% 7.515 7.53

^P15 ^P15

2 BEPu 15k/15 1,000u

BEPS 15k/60% P25,000

3 1,000u MOS: 500u

Sales 25 12.5
VC -10 -5
CM 15 7.5
FC -15
Profit 0

4 Tu (15k+12k)/15

1,800 u

Ts (15k+12k)/60%

P45,000

5 Tu (15k+9k)/15 7,200/80%

1,600u

Ts (15k+9k)/60%

P40,000

6 Sales 40
VC -16
CM 24
FC -15

Profit 9

Tax -1.8

aT Profit 7.2

Ts (15k+10%)/60% 0.8333Ts = 25,000

25k+16.67% Ts= 30,000

25k+16.67Ts

7 800u

Sales 20 30
VC -8 -12
CM 12 0 18
FC -15 -6 -21
Profit -3 -6 -3

Req. Inc in NI/CM 6000

CM/u 15

Units 400

8 Total Units Fixed Comm

Sales 37.5 25 15 15

4
 VC -15 -10 -6 -7.5

CM 22.5 15 9 7.5

FC -15 -10 -15 -13.5

Profit 7.5 5 -6 -6

Fixed Salary Commission Based

4,000=2,500+(25*10%)

4,000-2,500=2.5x

1,500=2.5x

x=600

2 Chair Table

S 750 12.5 100% 300 20 100% 1050

VC -600 -10 -80% -225 -15 -75% -825

CM 150 2.5 20% 75 5 25% 225

FC -90

NI 135

Chair Table

S 300 12.5 100% 120 20 100% 420

VC -240 -10 -80% -90 -15 -75% -330
CM 60 2.5 20% 30 5 25% 90
FC -90
NI 0

Chairs 60 80% 56

Table 15 20% 14

75 100% 70 (90+120)/3

WACMu Computation

Chairs 2.5 80% 2

Table 5 20% 1

100% 3

3 DOL = CM/NI (150/30) 5x

Before ^10% After

Sales 250 25 275

VC -100 -10 -110
CM 150 15 165

FC -120 0 -120

Profit 30 15 45

^10% (15/30) ^50%

TOTAL % BEP MOS

Sales 660 100% 528 132 MOSr = (132/660) 20%

VC -396 -60% -316.8 -79.2 BEr = (528/660) 80%

CM 264 40% 211.2 52.8
FC -211.2 -32% -211.2
Profit 52.8 8% 0

CMR * MOSr = NPR

5
 40% * MOSr = 8%

MOSr = 20%

DOL = CM/NI DOL = S/MOS DOL = 1/MSR

(264/52.8) (660/132) (1/20%)

5x 5x 5x

1 C

2 D

3 B

4 D

5 C

6 C

7 A

8 D

9 B

10 C

11 C

6
1 Absorption Costing Per Unit Variable Costing

DM 15000 300 300

DL 10000 200 200
VFOH 5000 100 100

FFOH 20000 400

Total 50000 1000 600

E Units 15 15

15000 9000

Absorption Variable

Sales 60 Sales 60

COS -40 COS -24

GP 20 GP 36
Exp -5 Exp -5
NI 15 NI 31

4 Change in P = Change P-S; 50-40 or E-B 10 * 400 4000

in Inv * unit FFOH 15 - 5

2 2A: (8+7+2+1)*1.5 27
C

2B:B (8+7+2+3)*1.35 27

3 Full Unit Cost 48+12+6+2.5+3+2 73.5

1 73.5+15%(48+12) 82.5

2 73.5+50%(12+6+3) 84

3 73.5+30%(12+6+48 93.3
)

4 73.5+25%(48+12+6 90.63
+2.5)

5 73.5+20%(48+12+6 87.3
+3)

6 73.5+10%(73.5) 80.85

7 Relevant Cost 48+12+6+2 68

Wrap Up Excercises

1 C

2 D

3 A

4 B

5 A

6 C

7 D

8 B

9 C

10 A

11 B

12 A

13 B

7
14 C

15 A

16 D

17 B

18 D

19 D

20 A

8
1 Production and Inv Budget

Sales 100% 100

COGS 60% 60 A

GP 40% 40

OPEX 30% 30

GP 10% 10

COGS 60
FG, e 5
FG, b -10
CGM 55
WIP, e 2.5
WIP, b -7.5
TMC 50 B

TMC 50

DL 20

FOH 15 C

DM, used 15

DM used 15

DM, end 4

DM, available 19
DM, beg -1.5
DM, purch 17.5 D

2 Sales and AR budget

Projection

1 60% Month of Sale

2 30% After Sale

3 10% Second after sale

Start with Sept bc complete

collection

Month Sales July August September October November

July 480 288 144 48

August 420 252 126 42

September 500 300 150 50

October 550 330 165

November 600 360

474 575
A B

October

September 500 40% 200

August 420 10% 42

242 C

December

November 600 40% 240

9
 October 550 10% 55

295 D

3 Merchandise Purc Budget

July August
MI, e 480 640
COGS 950 1200
MI, b -380 -480
Purchases 1050 1360
A B

4 Pro-Forma SCF

Transaction Operating Investing Financing

1 880

2 -125

3 -110

4 500

5 -600

6 105

7 250

8 -100

9 -550 550

10 -450

775 -175 -250 350

A B C D

5 A Volume Probability Expected Value

300 10% 30

600 30% 180

900 30% 270

1200 20% 240

1500 10% 150

870 A
B Budgeted Profit Probability Expected Value

-70 10% -7

10 30% 3

60 30% 18

100 20% 20

140 10% 14

48 B

6 Indifference Point

A Success 60% 80 48

Failure 40% 20 8

56
Investment -38
NCF 18
A

B 80x + 20(1-x) = 38

60x = 18

10
 Success = 30%

Failure = 70% B

Success 80 30% 24
Failure 20 70% 14
Total 38

7 Joint Probability

Probability of Damage

A 30% 10% 3% 30% A

H 50% 8% 4% 40% B

G 20% 15% 3% 30% C

10%

8 D Now: 200

Later Cold 150

Not Cold Rain 200

No Rain 150 350

Cold 20% 150 30

Not COld 80% 350 280

310

9 Decision Payoff Table 10% 50% 40%

0 Unit 1 Unit 2 Units Expected Value

Stock 0 0 0 0 0

Stock 1 -50 200 200 175

Stock 2 -100 150 400 225

10 Perfect Information 10% 50% 40%

0 Unit 1 Unit 2 Units Expected Value

Stock 0 0 0 0 0
Stock 1 -50 200 200 175
Stock 2 -100 150 400 225

A 260 (200*50%)
+(400*40%)

B 35 (260-225)

1 D

2 B

3 B

4 D

5 D

6 A

7 D

8 A

9 A

10 A

11 A

12 A 72+20

13 C 3+2.24+3.465

11
14 C 72.912+52
15 B 45+12-11.25

16 D *correction Increase in Inv. (330+12)

17 D (3.9+2.4-1.95)

18 B (88+48-22)

19 B (520-490)

20 B

12
1 B1 10k Units Increase 12.5k Units Dif in NI

S 500 25% 625

VC -300 25% -375
CM 200 25% 250

FC -120 30 -150

NI 80 100 20

B2 Inc in units 50 10k*25%*20

Inc in Adv. -30

Total

2 Make or Buy

Make Buy DM 1400

VC to make 46 DL 600
Cost to buy 50 (2.5*20) VFOH 300
Rentals 9 Total 2300
Total 55 50 Units 20

A / Total 46000

B 55k/20 2,750 Units

3 Accept or Reject

500k Units +25k Units

S 25000 50 1000 40
VC -18000 -36 -950 -38
CM 7000 14 50 2
FC -5000 0
NI 2000 50

Accept

Differential Solution
1000

-950

50

4 Special Order

Min P 25k Min P 25k+10k

35k

DM 9 SP 31
DL 7 DM 9
VOH 5 DL 7
VSAE 4 VOH 5 -21

25 CM/u 10

13
5 Continue or Shutdown

Butter Dynamite No Butter

800 800

-360 -360

440 440

-180 -180

260 260

-180 -120 -300

140 -40

Alternative Dynamite is
Irrelevant Cost

NI, total 110

Segment Margin -150

Total -40

Butter Dynamite Decrease No Butter

800 640 640

-360 -288 -288

440 352 352

-42 -180 -222

260 130

-180 -120 -300

140 -170

P/L b4 110 Decrease -88 440*20%

P/L af 170 SM -150

Decrease 280 FC -42

Decrease -280

6 Product Elimination

BEPu 5,000 u

SCPu 3,000 u

Cont. 5 4 3 2
CM 5 4 3 2
FC -5 -5 -5 -5

NI 0 -1 -2 -3

SDown

CM 0 0 0

FC -2 -2

NI -2 0 -2

14
 7 Sell or PF

SV@S/Off Final SV Increase in SV APC Net gain

P 100 200 100 40 60 Process

S 200 240 40 50 -10 Sell at S/O

Y 50 90 40 60 -20 Sell at S/O

Total 350 530 180 150 30 Process

A S and Y

B Process

8 Scrap or Rework

Scrap Modify

Cost -50 -50

Realization 5

Prime Cost -12

Overhead -4.8

SP, new 25

Total Loss -45 -41.8

3.2 Adv

9 A. B Best Product Combi

CM MH Priority

A 20 10 2 3
B 18 5 3.6 1

C 25 10 2.5 2

MH 2400

B 400

C 1500

A 500

B 3,190 (1000+1440+3750-
3000)

10 Linear Programming

Objective Function Max. Z = 3A + 4B

Non-Negativity A, B > or = 0
Function

Constraint Funchtion 2A + 5B < or = 120

4A + 2B < or = 80

2A + 5B < or = 120

A=0 B=0 2A+5(20-2A)=120

(0, 24) (60, 0) A=10

15
 4A + 2B < or = 80

A=0 B=0 2B=80-4A

(0, 40) (20, 0) B=40-2A

B=20

(10, 20)

Wrap-Up

1 C

2 A

3 C

4 D

5 C

6 B

7 C

8 B

9 A

10 A

11 C

12 D

13 B

14 D

15 A

16 D

17 B

18 C

16
Pg 3 Output Input (DM)

BP: 1k u BQ: 3k pcs * P5 15 Planning

AP: 1.2k u SQ: 3.6k pcs * P5 18 Controlling
AP: 1.2k u AQ: 4k pcs * P6 24 Organizing

1 A 3k pcs

B 15k

2 24k
3 A 3.6

B 18

C 2.4

D 24

4 A 9U (24-15)

B 6U (24-18)

C 2U

D 4U

5 Actual Standard

AQ 4000 SQ 3800
AP 4 SP 5

A 3F

B 1U

C 4F

D 5F

E C

6 A 2F

B 4F

C 2U

D A

2 1 14F 310-90(3.6)

2 40F 60(2-3)

30(5-4)

10(4-5)

3 10F TAQASP Alt. Solution

60*3 (60-50)*3

(30-40)*4

10*5 (10-10)*5

vs

100*3.6
4 36U (100-90)*3.6

1 D

17
 2 C

3 B

4 C

5 C

6 B 144U (4.1-3.9)0.72
7 B 135U Silent: Price
8 A

9 B 6.15F (123-129.15)

10 A

Pg 4 1 A 10k hrs Denominator Activity

B 20k

C 10k

D 30

E 2

F 1

G 3

2 27.5 (20+1(7.5))

3 28 20+1(8)

Pg 4 Normal Capacity =
Budgeted Hrs (12k)

Prob 5 1 30k

2 24k

3 27.5k

4 28k

5 3F

6 4U
7 2.5F
8 .5F

F V Total

AFOH 15 10 25

BAAH 20 7.5 27.5

BASH 20 8 28

SHSR 16 8 24

9 2.5U (10-7.5)

10 5F (15-20)

6 11 3F

12 2.5F

13 2U
14 4U
15 2U
16 1F

18
7 In HO

8 1 53U

2 26U

3 36F

4 39U

5 24U

19
9 1 8U
2 12F
3 36U
4 16F

10 A D

B A

C A

D C

E B

F D

20
 Wrap Up Excercises

1 D

2 C

3 B

4 C

5 C

6 B 144U (4.1-3.9)0.72
7 B 135U Silent: Price
8 A

9 B 6.15F (123-129.15)
10 A

11 C

12 D

13 C CON: 4.5F

14 B 4.5F+6.5U

15 D

21
 1 C

5 A

7 C

8 D

9 A

10 D

11

12 C

13

14

15 D

16 D

17

18

19

20 A

21 D

22 D

23 D

24 A

25 C

26

27

28 B

29

30 B

31 A

32

33 C

34 A

35

36

37 B

38 D

39 A

40 B

41

42 D

43

44

45 B

46

47

22
48

49

50 D

51 D

52

53

54

55

56

57 C

58 C

59

60 B

61

62

63

64

65

66

67

68

69

70

71 D

72 C

73 A

74

75

76

77

78

79

80

81

82

83 A

84 C

85 D

86

87 A

88 D

89

90 D

91

92 A

93

94

23
95

96 B

97

98

99 C

100 B

101 C

102

103

104 D

105 D

106

107

108

109 D

110

111

112

113 B

114 A

115

116

117

118

119

120 C

121 B

122

123

124

125 A

126 C

127

128 B

129

130 C

24