Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
26 Cards in this Set
- Front
- Back
|
Absorption Costing
|
COGS=DM, DL, v & f O/H
|
|
|
Variable Costing
|
COGS=DM, DL and VARIABLE o/h
|
|
|
Absorption Costing Advantages
|
required for taxes and GAAP, more prevalent, better meets matching principle
|
|
|
Absorbtion Costing Disadvantages
|
not suited for CVP because fixed costs are in product, treats fixed o/h as a variable cost by assigning a per unit amount of fixed o/h to each unit, produces positive NOI even when units sold is less than the break even point
|
|
|
Variable costing advantages
|
more useful for managers, better suited for c-v-p, easier to understand, produces NOI figures that are more consistent with expectations
|
|
|
Variable Costing Disadvantages
|
Must prepare diff income statement for taxes and GAAP, not acceptable for GAAP
|
|
|
(TOC) Theory of Constraints treats ____ as a period cost
|
DL
|
|
|
If Sales > Production, then NOI will be ______ in variable costing than absorption costing
|
greater
|
|
|
Draw out NOI For Variable and Absorption Costing
|
yeah
|
|
|
Advantages of (ABC) Activity Based Costing
|
weeds out non-value added activities, provides better cost data to support managers decisions such as unprofitable product lines, delivers more useful information than traditional when a company has a lot O/H and a diverse set of products
|
|
|
Unit-Level Cost Examples:
|
power to run processing plant
|
|
|
Batch-Level Cost ex
|
Set up equipment; ship orders
|
|
|
product-level costs ex
|
design or advertise a product
|
|
|
customer-level costs
|
sales calls; catalog mailings
|
|
|
organization-wide costs
|
facility costs, heat and cleaning of offices
|
|
|
ABC limitations
|
expensive, potential to misinterpret unfamiliar #'s, does not conform to GAAP
|
|
|
A budget is used for
|
Planning and Control. also helps direct and motivate and make decisions
|
|
|
Planning:
|
develop objectives; prepare various budgets to achieve these objectives
|
|
|
Control:
|
Take steps to ensure the objectives are attained
|
|
|
Communication Tool:
|
ex Dashboards & Balanced Scorecards
|
|
|
Motivational:
|
Influence Employees behavior
|
|
|
The performance indicator is
|
profit not NOI
|
|
|
General Model For Price Variance Analysis
|
Actual Quantity (Actual Price-Standard Price)
|
|
|
General model for Quantity Variance
|
Standard Price (Actual Quantity-Standard Quantity)
|
|
|
Draw out the chart version of finding variance
|
check on p69 of coursepack
|
|
|
Denominator hours:
|
the standard number of hours per unit times the planned production units
|
