Accounting 202 Exam 2

Front 1

If a system is _____ it is on the path to achieving its strategic objectives

Back 1

In Control

Front 2

What does the organization have to have for the process of control to have meaning and credibility?

Back 2

Knowledge and ability to correct situations that it identifies as out of control

Front 3

What are the Five Stages of Control?

Back 3

Planning, Execution, Monitoring, Evaluation, Correcting

Front 4

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

Back 4

Planning

Front 5

One of 5 Stages of Control:
Implementing the plan

Back 5

Execution

Front 6

One of 5 Stages of Control:
The process of measuring the system's current level of performance

Back 6

Monitoring

Front 7

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

Back 7

Evaluation

Front 8

One of 5 Stages of Control:
Taking the appropriate actions to return the system to a state of in control

Back 8

Correcting

Front 9

Relevance of the information generated and scope of the system are technical considerations of ___

Back 9

a well-designed MACS system

Front 10

4 Characteristics of Relevant Information

Back 10

Accurate, timely, consistent, flexible

Front 11

One of four characteristics of relevant information:
Inaccurate information is not useful for decision making because it is misleading

Back 11

Accurate

Front 12

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.

Back 12

Timely

Front 13

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

Back 13

Consistent

Front 14

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

Back 14

Flexible

Front 15

Must be comprehensive an dinclude all activities across the entire value chain of the organization

Back 15

Scope of the system

Front 16

A sequence of activities that should contribute more to the ultimate value of the product than to its cost

Back 16

The value chain

Front 17

The cycle of the Value Chain:

Back 17

Research, Development and Engineering Cycle; Manufacturing Cycle; Post-Sale Service and Disposal Cycle

Front 18

Research, Development and Engineering Cycle is what type of costing?

Back 18

Target Costing and Value Engineering

Front 19

Manufacturing Cycle is what type of costing?

Back 19

Kaizen Costing

Front 20

Research, Development and Engineering Cycle; Manufacturing Cycle; Post-Sale Service and Disposal Cycle are all apart of what costing systems?

Back 20

Total-Life-Cycle Costing; Environmental Costing; and Benchmarking

Front 21

The name of the process of managing all costs along the value chain

Back 21

Total-Life-Cycle Costing (TLCC)

Front 22

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

Back 22

Total-Life-Cycle Costing

Front 23

What costs play a heightened role in a total-life-cycle cost perspective?

Back 23

Opportunity Costs

Front 24

From the manufacturer's perspective, total-life-cycle product costing integrates these functional life-cycle concepts:

Back 24

Research, development, and engineering; Manufacturing; and Post-sale service and disposal

Front 25

Research, development, and engineering cycle has three stages:

Back 25

Marketing research, product design, and product development

Front 26

Emerging customer needs are assessed and ideas are generated for new products

Back 26

RD&E Cycle: Market research

Front 27

Scientists and engineers develop the technical aspects of products

Back 27

RD&E Cycle: Product design

Front 28

The company creates features critical to customer satisfaction and designs prototypes, production processes, and any special tooling required

Back 28

RD&E Cycle: Product development

Front 29

Costs that a company knows it will have to incur at a future date

Back 29

Committed costs

Front 30

In what cycle are the costs incurred in the production of the product. This is where product costing traditionally plays its biggest role

Back 30

Manufacturing Cycle

Front 31

Operations management methods help to reduce manufacturing life-cycle product costs:

Back 31

Facilities layout, Just-in-time manufacturing

Front 32

This cycle overlaps the manufacturing cycle

Back 32

Post-sale service and disposal cycle

Front 33

Begins once the first unit of a product is in the hands of the customer

Back 33

Service cycle

Front 34

Begins at the end of a product's life and lasts until the customer retires the final unit of a product

Back 34

Disposal

Front 35

When are the costs for service and disposal committed?

Back 35

In the RD&E Stage

Front 36

The three stages of the service cycle:

Back 36

Rapid growth, transition, maturity

Front 37

From the first time the product is shipped to the growth stage of its sales

Back 37

Rapid growth

Front 38

Fromt he peak of sales to the peak in the service cycle

Back 38

Transition

Front 39

From the peak in the service cycle to the time of the last shipment made to a customer

Back 39

Maturity

Front 40

These costs often include those associated with eliminating any harmful effects associated with the end of a product's useful life

Back 40

Disposal Costs

Front 41

A method of profit planning and cost management that focuses on products with discrete manufacturing processes

Back 41

Target Costing

Front 42

Its goal is to design costs out of products in the RD&E stage of a product's total life cycle

Back 42

Target Costing

Front 43

This begins iwth market research into customer requirements followewd by product specification

Back 43

Traditional method; single event

Front 44

Marketing research that is nto a single event is under...

Back 44

Target Costing

Front 45

Using this method, a lot of time is spent at the product specification and design stage

Back 45

Target Costing

Front 46

Goal of Target Costing:

Back 46

Minimizing the cost of ownership of a product over its useful life

Front 47

Results from a long-run profit analysis, often based on return on sales

Back 47

Target profit margin

Front 48

This process includes examination of each component of a product to determine whether it is possible to reduce costs while maintaining functionally and performance.

Back 48

Value Engineering

Front 49

Made up of individuals representing the entire value chain that guide the process throughout

Back 49

Cross-functional teams

Front 50

Two differences that characterize the Target Costing Method:

Back 50

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

Front 51

Concerns about Target Costing:

Back 51

Japan and concerns about implementing the system

Front 52

Focuses on reducing costs during the manufacturing stage of the total life cycle of a product

Back 52

Kaizen Costing

Front 53

Making imporvements to a process through small, incremental amounts rather than through large innovations

Back 53

Kaizen

Front 54

Kaizen costing's goal:

Back 54

ensure that acutal production costs are less than the prior year cost

Front 55

The amount the cost base must be reduced to reach the profit target

Back 55

The targeted cost

Front 56

The ratio of the target reduction amount to the cost base

Back 56

The target reduction rate

Front 57

Concerns about the Kaizen Costing System:

Back 57

-Could put enormous pressure on employees to reduce every conceivable cost
-leads to incremental rather than radical process improvements

Front 58

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

Back 58

Environmental costing

Front 59

Environmental costs fall into two categories:

Back 59

Explicit costs; implicit costs

Front 60

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

Back 60

Explicit costs

Front 61

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

Back 61

Implicit costs

Front 62

A way for organizations to gather information regarding the best practices of others

Back 62

Benchmarking

Front 63

One of five stages of Benchmarking:
INternal study and preliminary competitive analysis

Back 63

Stage one:
deciding which key areas to benchmark to study

Front 64

One of five stages of Benchmarking:
Developoing long-term commitment to the benchmarking peoject and coalescing the benchmarking team

Back 64

Stage two

Front 65

Identifying benchmarking partners- willing participants who know the process

Back 65

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

Front 66

Information gathering and sharing methods

Back 66

Stage four

Front 67

Taking action to meet or exceed the benchmark

Back 67

Stage five