CSUF Acct 201b Formulas – Complete Study
Guide
turnover Right Ans - = sales / average operating assets
margin Right Ans - = net / sales
return on investment Right Ans - = net op income / avg op
assets
labor efficiency variance Right Ans - = SR (AH - SH)
labor rate variance Right Ans - = AH (AR - SR)
residual income Right Ans - = net income - ( avg op assets x
min req rate of return )
internal rate of return Right Ans - = investment req / annual
cash inflow
profitability index Right Ans - = pv of cash inflows /
investment req
simple rate of return Right Ans - = annual incr net / initial
investment
materials price variance Right Ans - = AQ ( AP-SP )
materials quantity variance Right Ans - = SP ( AQ - SQ )
payback period Right Ans - = investment req / annual net
cash flow
net present value Right Ans - = cash inflows - outflows
conversion cost Right Ans - = dl + manufacturing ovhd
