by TheBusinessProfessor | Feb 23, 2025 | Managerial & Financial Accounting & Reporting
What are Prime and Conversion Costs? Prime and conversion costs concern the classification of direct material, labor, and overhead. What is a Prime Cost? Prime costs are generally direct material and direct labor that goes into the development and preparation of the...
by TheBusinessProfessor | Feb 23, 2025 | Managerial & Financial Accounting & Reporting
Effect of Variable Costing vs Absorption Costing Advantages of Variable Costing
by TheBusinessProfessor | Feb 23, 2025 | Managerial & Financial Accounting & Reporting
What is a Debt to Equity Ratio?The debt-to-equity (D/E) ratio is used to evaluate a company’s financial leverage and is calculated by dividing a company’s total liabilities by its shareholder equity. This metric demonstrates the extent to which the company funds...
by TheBusinessProfessor | Feb 23, 2025 | Managerial & Financial Accounting & Reporting
What is Segmented Income? Segmented income is segment revenues minus segment expenses. It is often used to assess and compare the performance of company segments considered Investment Centers of the company. . The starting point for evaluating investment centers is...
by TheBusinessProfessor | Feb 23, 2025 | Managerial & Financial Accounting & Reporting
What is Residual Income?Residual Income is the dollar amount of division operating profit in excess of the division’s cost of acquiring capital to purchase operating assets. The calculation is as follows:Residual income = Operating income − (Percent cost of capital ×...
by TheBusinessProfessor | Feb 23, 2025 | Managerial & Financial Accounting & Reporting
What is the Capital Expenditure Ratio?The capital expenditure ratio is cash provided by operating activities divided by capital expenditures. Capital expenditure ratio = Cash provided by operating activities / Capital expendituresThis ratio measures the company’s...
