ACG 2071 Exam 3 FSU| Ques ons and answers |
Updated RATED A+ | 2026
Budge ng formula (all budgets)
What goes out + ending inventory - beginning = what you need
Price (Rate) Variance
| AP-SP | x AQ
Usage (Efficiency) Variance
| AQ-SQ | x SP
Price Variance + Usage Variance
Flexible Budget Variance
Master/Sta c Budget Variance
Master Budget - Actual Results
Sales Ac vity (Volume) Variance
Master Budget - Flexible Budget
Flexible Budget Variance
Flexible Budget - Actual Budget
Ideal Standards
What we can achieve under op mal circumstances
Prac cal Standards
What we can achieve under normal/typical circumstances
what we focus on
Easily A+ainable Standards
What can be achieved even if "shit hits the fan"
Decentralized Organiza ons
Companies in which lower level managers have been granted substan al authority
, Cost Centers
Try to keep costs as low as possible
Profit Centers
In charge of both revenues and costs
Investment Centers
Keep their eyes on invested capital
Revenue Centers
Monitor the money coming into a company
ROI
Income / Investment
How do you increase ROI (holding all else constant)
More Sales
Less Costs
Less Investment
Increase income or decrease investment
Residual Income formulas
*Opera ng Income - (% cost of capital x assets/Investment)
or
Op Inc - Minimum Available Income
know both
cost of capital also called: Target rate of return, hurdle rate, desired ROI, Return on invested
capital*
Variable Cost-Based Price
Charge the other division the variable cost to produce the item
Cost-Based Price
Charge the other division the variable + fixed cost to produce the item
Cost-Plus-Based Price
Charge the other division the Cost-Based Price PLUS some percent markup
Updated RATED A+ | 2026
Budge ng formula (all budgets)
What goes out + ending inventory - beginning = what you need
Price (Rate) Variance
| AP-SP | x AQ
Usage (Efficiency) Variance
| AQ-SQ | x SP
Price Variance + Usage Variance
Flexible Budget Variance
Master/Sta c Budget Variance
Master Budget - Actual Results
Sales Ac vity (Volume) Variance
Master Budget - Flexible Budget
Flexible Budget Variance
Flexible Budget - Actual Budget
Ideal Standards
What we can achieve under op mal circumstances
Prac cal Standards
What we can achieve under normal/typical circumstances
what we focus on
Easily A+ainable Standards
What can be achieved even if "shit hits the fan"
Decentralized Organiza ons
Companies in which lower level managers have been granted substan al authority
, Cost Centers
Try to keep costs as low as possible
Profit Centers
In charge of both revenues and costs
Investment Centers
Keep their eyes on invested capital
Revenue Centers
Monitor the money coming into a company
ROI
Income / Investment
How do you increase ROI (holding all else constant)
More Sales
Less Costs
Less Investment
Increase income or decrease investment
Residual Income formulas
*Opera ng Income - (% cost of capital x assets/Investment)
or
Op Inc - Minimum Available Income
know both
cost of capital also called: Target rate of return, hurdle rate, desired ROI, Return on invested
capital*
Variable Cost-Based Price
Charge the other division the variable cost to produce the item
Cost-Based Price
Charge the other division the variable + fixed cost to produce the item
Cost-Plus-Based Price
Charge the other division the Cost-Based Price PLUS some percent markup
