Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key


Play button


Play button




Click to flip

67 Cards in this Set

  • Front
  • Back
If a system is _____ it is on the path to achieving its strategic objectives
In Control
What does the organization have to have for the process of control to have meaning and credibility?
Knowledge and ability to correct situations that it identifies as out of control
What are the Five Stages of Control?
Planning, Execution, Monitoring, Evaluation, Correcting
One of 5 Stages of Control:
Developing an organization's objectives, choosing activities to accomplish the objectives, and selecting measures to determine how well the objectives were met
One of 5 Stages of Control:
Implementing the plan
One of 5 Stages of Control:
The process of measuring the system's current level of performance
One of 5 Stages of Control:
When feedback about the system's current level of performance is compared to the planned level so that any discrepancies can be identified and corrective action prescribed
One of 5 Stages of Control:
Taking the appropriate actions to return the system to a state of in control
Relevance of the information generated and scope of the system are technical considerations of ___
a well-designed MACS system
4 Characteristics of Relevant Information
Accurate, timely, consistent, flexible
One of four characteristics of relevant information:
Inaccurate information is not useful for decision making because it is misleading
One of four characteristics of relevant information:
Accurate information that is available too late is of no use for decision making

The MACS must be designed so that the results of performance measurement are fed back to the appropriate units in the most expedient way possible.
One of four characteristics of relevant information:
The language used and the technical methods of producing management accounting information do not conflict within various parts of an organization
One of four characteristics of relevant information:
MACS designers must allow employees to use the system's available information in a flexible manner so they can customize its application for local decisions

If flexibility is not possible, an employee's motivation to make the best decision may be lessened for the decision at hand, expecially if different units engage in different types of activities
Must be comprehensive an dinclude all activities across the entire value chain of the organization
Scope of the system
A sequence of activities that should contribute more to the ultimate value of the product than to its cost
The value chain
The cycle of the Value Chain:
Research, Development and Engineering Cycle; Manufacturing Cycle; Post-Sale Service and Disposal Cycle
Research, Development and Engineering Cycle is what type of costing?
Target Costing and Value Engineering
Manufacturing Cycle is what type of costing?
Kaizen Costing
Research, Development and Engineering Cycle; Manufacturing Cycle; Post-Sale Service and Disposal Cycle are all apart of what costing systems?
Total-Life-Cycle Costing; Environmental Costing; and Benchmarking
The name of the process of managing all costs along the value chain
Total-Life-Cycle Costing (TLCC)
This system provides information for managers to understand and manage costs through a product's stages of: design, development, distribution, maintenance, manufacturing, marketing, service, and disposal
Total-Life-Cycle Costing
What costs play a heightened role in a total-life-cycle cost perspective?
Opportunity Costs
From the manufacturer's perspective, total-life-cycle product costing integrates these functional life-cycle concepts:
Research, development, and engineering; Manufacturing; and Post-sale service and disposal
Research, development, and engineering cycle has three stages:
Marketing research, product design, and product development
Emerging customer needs are assessed and ideas are generated for new products
RD&E Cycle: Market research
Scientists and engineers develop the technical aspects of products
RD&E Cycle: Product design
The company creates features critical to customer satisfaction and designs prototypes, production processes, and any special tooling required
RD&E Cycle: Product development
Costs that a company knows it will have to incur at a future date
Committed costs
In what cycle are the costs incurred in the production of the product. This is where product costing traditionally plays its biggest role
Manufacturing Cycle
Operations management methods help to reduce manufacturing life-cycle product costs:
Facilities layout, Just-in-time manufacturing
This cycle overlaps the manufacturing cycle
Post-sale service and disposal cycle
Begins once the first unit of a product is in the hands of the customer
Service cycle
Begins at the end of a product's life and lasts until the customer retires the final unit of a product
When are the costs for service and disposal committed?
In the RD&E Stage
The three stages of the service cycle:
Rapid growth, transition, maturity
From the first time the product is shipped to the growth stage of its sales
Rapid growth
Fromt he peak of sales to the peak in the service cycle
From the peak in the service cycle to the time of the last shipment made to a customer
These costs often include those associated with eliminating any harmful effects associated with the end of a product's useful life
Disposal Costs
A method of profit planning and cost management that focuses on products with discrete manufacturing processes
Target Costing
Its goal is to design costs out of products in the RD&E stage of a product's total life cycle
Target Costing
This begins iwth market research into customer requirements followewd by product specification
Traditional method; single event
Marketing research that is nto a single event is under...
Target Costing
Using this method, a lot of time is spent at the product specification and design stage
Target Costing
Goal of Target Costing:
Minimizing the cost of ownership of a product over its useful life
Results from a long-run profit analysis, often based on return on sales
Target profit margin
This process includes examination of each component of a product to determine whether it is possible to reduce costs while maintaining functionally and performance.
Value Engineering
Made up of individuals representing the entire value chain that guide the process throughout
Cross-functional teams
Two differences that characterize the Target Costing Method:
Cross-functional teams are made up of individuals representing the entire value chain that guide the process throughout; and suppliers play a critical role in makking target costing work
Concerns about Target Costing:
Japan and concerns about implementing the system
Focuses on reducing costs during the manufacturing stage of the total life cycle of a product
Kaizen Costing
Making imporvements to a process through small, incremental amounts rather than through large innovations
Kaizen costing's goal:
ensure that acutal production costs are less than the prior year cost
The amount the cost base must be reduced to reach the profit target
The targeted cost
The ratio of the target reduction amount to the cost base
The target reduction rate
Concerns about the Kaizen Costing System:
-Could put enormous pressure on employees to reduce every conceivable cost
-leads to incremental rather than radical process improvements
Selecting suppliers whose philosophy and npractice in dealing with the environment matches the buyer's; disposing of waste products during the production process; addressing post-sale service and disposal issues
Environmental costing
Environmental costs fall into two categories:
Explicit costs; implicit costs
The direct costs of modifying technology and processes, costs of cleanup and disposal, costs of permits to operate a facility, fines levied by government agencies and litigation fees
Explicit costs
More closely tied tothe infrastructure required to monitor environmental issues; these costs are usually administration and legal counsel, employee education and awareness, and the loss of goodwill if enivronmental disasters occur
Implicit costs
A way for organizations to gather information regarding the best practices of others
One of five stages of Benchmarking:
INternal study and preliminary competitive analysis
Stage one:
deciding which key areas to benchmark to study
One of five stages of Benchmarking:
Developoing long-term commitment to the benchmarking peoject and coalescing the benchmarking team
Stage two
Identifying benchmarking partners- willing participants who know the process
Stage three
-Critical factors:
--Size of the partners
--Number of partners
--Relative position of the partners within and across industries
--Degree of trust among partners
Information gathering and sharing methods
Stage four
Taking action to meet or exceed the benchmark
Stage five