Term
|
Definition
| Setting objectives and identifying ethods to achieve those objecties. |
|
|
Term
|
Definition
| Monitoring a plan's implementation and taking corrective action as needed. |
|
|
Term
|
Definition
| The process of choosing among competig alternatives. |
|
|
Term
|
Definition
| two approaches, cst leadership (wal-mart) or superior products/ differentiation (Neiman Marcus) |
|
|
Term
|
Definition
| the set of activties required to design, develop, produce, market, and deliver products andservices to customers. |
|
|
Term
|
Definition
| Search for ways to increase efficiency by reducing waste, increase quality and reduce costs. |
|
|
Term
|
Definition
cost to produce a product. Used by manufacturing and merchadising businesses, recoded in the inventory account.
Product Cost= Direct Materials + Direct Labor+ Manufacturing Overhead |
|
|
Term
|
Definition
| Selling, general and administrative costs. Cost incurred by a business not needed to produce product. Expensed in the period in which they are incurred. |
|
|
Term
|
Definition
the way costs are measured and recorded. Once accounted for, cost is assigned to a cost object. |
|
|
Term
|
Definition
| products; services; customers/clients; deparmetnt's area/ territory |
|
|
Term
|
Definition
| Costs are assigned to cost object either through direct tracing or allocation |
|
|
Term
|
Definition
| costs that cn be easily and accuratel trced to a cost object. |
|
|
Term
|
Definition
| costs thats cannot be easily and accurately traced to a cost object. AKA overhead |
|
|
Term
|
Definition
| When an indirect cost is assigned to a cost object using a reasonable and convenient method. |
|
|
Term
|
Definition
| =Direct Materials+ Direct Labor |
|
|
Term
|
Definition
| Direct Labor+ Manufacturing Overhead |
|
|
Term
|
Definition
| costs that, in total, vary in direct proportions to changes in output within the relevant range. When activity level increases, variable cost per unit remains constant and total variable costs increases. |
|
|
Term
|
Definition
| costs that, in total, are constant within the relevant range as the level of output increases or decreases. When activity level increases Total fixed costs remains constant and fixed cost per unit decreases. |
|
|
Term
|
Definition
1. costs that have both a fixed and a variable component. Example: Cell phone Bill or employee that works on commission. |
|
|
Term
|
Definition
| displays a constant level of cost for a range of output and the jumps to higher level of cost at some point. |
|
|
Term
|
Definition
| the range output over which an assumed cost relationship is valid for the normal operations of a firm. |
|
|
Term
|
Definition
| Accumulate costs by individual products. (This is used when all the products made are not the same) |
|
|
Term
|
Definition
| Allocate costs evenly to homogeneous products. (This system is used to account for continuous mass production of uniform products) |
|
|
Term
|
Definition
| Requires that units pass through one process before they can be worked on in later processes. |
|
|
Term
|
Definition
| Partially completed unites can be worked on simultaneously in different processes and then brought together in a final process for completion. |
|
|
Term
| Equivalent Units of Output |
|
Definition
| the total number of complete units that could have been produced given the total manufacturing effort used during the period. |
|
|
Term
|
Definition
| Varies with output volume |
|
|
Term
|
Definition
| Varies with the number of batches produced. |
|
|
Term
|
Definition
| Varies with the number of product lines. |
|
|
Term
|
Definition
Necessary to operate the plant facility but does not vary with units, batches or product lines. |
|
|
Term
|
Definition
| are factors that measure the consumption of activities by products. |
|
|
Term
|
Definition
are factors that measure the consumption of resources by activities. |
|
|
Term
|
Definition
Products consume overhead activities in different proportions- size, weight, complexity, time… |
|
|
Term
|
Definition
activities are necessary to remain in business- making a product or service, serving customers.. |
|
|
Term
|
Definition
Activities are NOT essential to remain in business. Examples: moving, storing, waiting, inspecting, etc. |
|
|
Term
|
Definition
Incurred to prevent poor quality in the products or services being produced. |
|
|
Term
|
Definition
| incurred to determine whether products and services conform to requirements or customer needs. |
|
|
Term
|
Definition
incurred when products or services do not conform to specifications or customer needs before delivery to customers. |
|
|
Term
|
Definition
| Incurred with products or services fail to conform to requirements or satisfy customer needs after delivery. |
|
|
Term
|
Definition
| assigns only variable manufacturing csts to the product ie. includes fixed overhead. |
|
|
Term
|
Definition
| assigns al manufacturing costs to the product ie. Includes fixed overhead. |
|
|
Term
|
Definition
| cost of placing and receiving an order Ex. purchasing agents |
|
|
Term
|
Definition
| costs of keeping and storing inventory. Example insurance |
|
|
Term
|
Definition
| Costs of having inventory available for a customer of production. Examples: costs of overnight shipping |
|
|
Term
|
Definition
| is the comprehensive financial plan for the organization as a whole |
|
|
Term
|
Definition
| describe the income- generating activities of the firm: sales, production, expenses resulting in an income statement |
|
|
Term
|
Definition
| details in inflows and outflows of cash and the overall financial position (balance sheet) |
|
|
Term
|
Definition
Capital Investment Decisions are concerned with the process of planning, setting goals and priorities, arranging financing, and using certain criteria to select long-term assets. |
|
|
Term
|
Definition
| the time required for a business to recover its intial cash investment in a project. The payback period for a project generating uniform cash flows can be defined as Payback=Original Investment/Annual cash flow |
|
|
Term
| Accounting Rate of Return AROR |
|
Definition
| =Average Income/ Intial Investment |
|
|
Term
|
Definition
the difference between the present value of the inflows and outflows of the project, as discounted using the firm’s required rate of return. |
|
|
Term
|
Definition
| IRR the interest rate that equates the present value of future cash inflows to the present value of the cash outflows (investment). |
|
|
Term
|
Definition
is a follow-up analysis of a capital project once it is implemented that compares actual benefits and costs with estimates and proposes corrective actions. (Necessary to keep estimate honest). |
|
|
Term
| Accounting Rate of Return |
|
Definition
| =Average income per year/ Investment |
|
|
Term
|
Definition
| computes operating cash flows by adjusting each line on the income statement to reflect cash flows. Must attach a supplemental schedule showing the reconciliation of net income to operating cash flows. |
|
|
Term
|
Definition
| computes operating cash flows by adjusting net income for items to reflect cash received or paid with no supplemental schedule needed. |
|
|
Term
|
Definition
| difference between the sales price needed to capture a predetermined market share and the desired per-unit profit. |
|
|
Term
|
Definition
a. is a budget for a particular level of activity. The master budget is a good example of a static budget |
|
|
Term
|
Definition
| is, in effect, a set of budgets that present expected costs for a range of potential activity levels. |
|
|
Term
|
Definition
| decision making is delegated to lower levels; often occurs as organizations grow |
|
|
Term
|
Definition
| Responsible for income and investment in assets, Auto Leasing Division; example: headquarters, CEO |
|
|
Term
|
Definition
| rtio of income to the average investment usd to generate the income |
|
|
Term
|
Definition
| also known as return on sales |
|
|
Term
|
Definition
| cost incurred in the past; never related to future decisions |
|
|
Term
|
Definition
| percentage of base cost; and is there to cover: costs not in base cost of product cost and desired profit |
|
|
Term
|
Definition
decisions involving a choice between internal and external production |
|
|
Term
|
Definition
| customer offers to purchase one time at a lower price |
|
|
Term
|
Definition
| decision to keep or drop a segment such as a product line |
|
|
Term
|
Definition
Most companies start with cost to determine price |
|
|
