(WIP) ACC 350 Exam 1 Study Material
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○ = operating income / revenues<br />
32. Steps:<br />
Pg. 23<br />
Sarah Allison Takash<br />
<strong>ACC</strong> <strong>350</strong>, Spring 2018<br />
<strong>Exam</strong> 1 <strong>Study</strong> <strong>Material</strong><br />
a. Determine total product revenues attributable to the particular product<br />
i. = “net sales”<br />
ii. = price * qty sold - returns and sales allowances<br />
b. Determine the total product-cost<br />
i. = Cost of all value chain activities associated with providing the product<br />
ii. = COGS + indirect/period/SG&A costs allocated to the product<br />
iii. = COGS + operating costs ---- (on income statement)<br />
c. Using (a) and (b), Determine the product’s operating income:<br />
i. Subtract total product-cost from total product-revenues to get the product’s<br />
operating income<br />
ii. = (product-operating income) = (total product-revenue) - (total product-cost)<br />
d. Divide total revenues (step a) by operating income (step b)<br />
i. = (Total product-revenue) / (product-operating income)<br />
e. Multiply by 100 to get a % → this is your operating profit margin<br />
<strong>Exam</strong>ple Problem from textbook: