BUS-A 202 Lecture Notes - Lecture 19: Outsourcing, Tax Shield, Cash Flow
Document Summary
Math questions: profit before taxes, absorption: revenue- (vmoh+fmoh per unit) (var. + fixed selling and admin costs: variable: revenue (vmoh+var. selling)- (fixed moh + fixed selling and admin) Inventory would be valued at: absorption: (difference between units produced and units sold) x ((dm+dl+v moh+ f. I(cid:374)(cid:448)e(cid:374)tor(cid:455) does(cid:374)"t (cid:449)orr(cid:455) a(cid:271)out sales u(cid:374)its just to fi(cid:374)d the differe(cid:374)(cid:272)e. Selling and admin expenses = net operating income: variable: unit product cost= dm+dl+v moh, unit product cost+ variable selling and admin expenses = contribution margin, contribution margin- fixed moh fixed selling and admin expenses= net operating income. Difference between beginning and ending i(cid:374)(cid:448)e(cid:374)tor(cid:455) = (cid:1009)(cid:1004)(cid:1004)(cid:1004). If it does(cid:374)"t gi(cid:448)e (cid:455)ou the u(cid:374)its of e(cid:454)(cid:272)ess (cid:272)apa(cid:272)it(cid:455), just a : multiply units by excess capacity (100- current used capacity) If the price the customer offered is bigger than the price you calculated, then accept. If price customer offered is smaller, then decline: (cid:862)a spe(cid:272)ial order for (cid:1005)(cid:1004)(cid:1004)(cid:1004) u(cid:374)its at 7(cid:1006)$ ea(cid:272)h (cid:449)as re(cid:272)ei(cid:448)ed.
