Toasted Dolphin

What are the challenges to informational quality?

Conflicting functional needs
System constraints
Non integrated processes

Define: Ideal Standards


Ideal standards represent costs that result from perfect efficiency and effectiveness in job performance.

Define: Currently Attainable Standards

Currently attainable standards represent costs that result from work performed by employees with appropriate training and experience but without extraordinary effort.

Margin of Safety in Dollars
Total Sales - Breakeven sales





Margin of Safety %
margin of safety in dollars / total sales or revenue

Breakeven point in dollars

Total fixed costs / contribution margin ratio

Contribution Margin Ratio

Contribution Margin / Revenue

Strategic Positioning

During strategic positioning, a firm will determine the best manner to achieve organizational goals and assess the quality practices of the organization.

Steps and Formula for economic value added:

1. Compare income to the required return

Investment x cost of capital = required return

2. Calculate the required amount of return and income after taxes
Income after taxes - required return = economic value added

Two Quantitative Methods for Evaluating Risks

Interval Measurement: Numerical scale measurements of events

Ratio Measurement: Proportional scale measurements of events

List Two Qualitative Methods for Evaluating Risks

Nominal Measurements: Groupings of events into like kinds

Ordinal Measurements: Lists of events in order of importance