Pro-forma Responsibility Cost Report:
Variance
Unfavorable
Costs Actual Budget (Favorable) Remarks
Direct costs
Controllable
-------- Pxxx Pxxx Pxxx
-------- xxx xxx -
Total Pxxx Pxxx Pxxx
Non-controllable
-------- Pxxx Pxxx Pxxx
-------- xxx xxx xxx
Total Pxxx Pxxx Pxxx
Indirect costs xxx xxx xxx
Total costs Pxxx Pxxx Pxxx
Sales
Contribution Approach Statements:
(VC)
Sales
CM
Less: Variable Exp Variable (Budg VC per unit x Actual units)
(Controllable FC)
Contribution Margin Fixed (Budg total FC x Percentage of peak
Controllable Margin
Less: Traceable Fixed Exp period capacity required)
(Noncontrollable FC)
Divisional Segment Margin Total Costs to be charged
Segment Margin
Less: Common Fixed Exp
(Indirect FC)
Net Operating Income
Net Profit
(Actual quantity - Budgeted quantity) x Budgeted price = Selling Quantity Variance
(Actual price - Budgeted price) x Actual unit sales = Selling Price Variance
(Actual quantity - Budgeted quantity) x Budgeted contribution margin = Sales Quantity Variance (CM level)
(Actual units sold - Budgeted units sold) x Budgeted average contribution margin per unit = Sales Volume Variance
(Flexi budget average CM per unit - Budgeted average CM per unit) x Actual unit sold = Sales Mix Variance
(Actual CM / Units sold - Budgeted CM / Units sold) x Actual quantity sold = Sales CM Variance
If division has no excess capacity (General rule): TP = Differential costs per unit + Lost CM per unit on outside sales
If division has idle or sufficient capacity: TP = Differential costs per unit or Variable manufacturing cost
Maximum amount willing to pay: TP = External market price
ROI = Net operating income / Average operating assets
ROI = (Net operating income / Sales) x (Sales / Average operating asset)
ROI = Operating profit margin x Asset turnover
Profit Margin = Net operating income / Sales
Investment Turnover = Sales / Invested assets
Return on Investment = Income / Investment
Return on Investment = Investment turnover x Return on sales
Residual Income = Income - (Required rate of return x Investment)
Residual Income = Net operating income - (Min req rate of return x Ave operating assets)
Economic Value Added = After tax operating income - (Weighted ave cost of capital x (Total asset - Current liabilities))
Return on Sales = Operating income / Sales
Return on Assets = Operating income / Ave asset
Productivity = Output / Input
Total Productivity = Units or sales value of output / Total cost of all input resources
Operational Productivity = Output units / Input units
Financial Productivity = ₱Output / ₱Input
Partial Productivity = No. of units or value of output manufactured / No. of units or cost of single or part of input
resources
Direct Materials Yield = Output / Input of materials
Output per Labor-Hour = Output / Input of labor hours
Output per Person Employed = Output / No. of labor forces
Process (Activity) Productivity = Output / Machine hour used
Market Share = Sales in units / Market size in units
Market Share Variance = Budgeted CM per unit x Actual market size in units x (Actual market share - Budgeted market
share)
Market Size Variance = [(Actual market size in units - Budgeted market size in units) x Budgeted market share] x
Budgeted CM per unit
Cost of Debt = Yield on outstanding debt x (1 - Tax rate)
Cost of Equity: Price of stock x (1 - Flotation cost) = Next expected dividend / (r - Growth rate)
WACC = (Cost of debt x Target capital structure debt) + (Cost of equity x Target capital structure common equity)
