Accounting Break

Front 1

A measure of the difference between the actual hourly labor rate and the standard rate, multiplied by the number of hours worked during the period.

Back 1

Labor rate variance

Front 2

A system of management in which standards are set for various operating activities, with actual results compared to these standards. Any differences that are deemed significant are brought to the attention o management as "exceptions"

Back 2

Management by exception

Front 3

Process (value-added) time as a percentage of through-put time

Back 3

Manufacturing cycle efficiency (MCE)

Front 4

A measure of the difference between the actual unit price paid for an item and the standard price, multiplied by the quantity purchased.

Back 4

Materials price variance

Front 5

A measure of the difference between the actual quantity of materials used n production and the standard quantity allowed, multiplied by the standard price per unit of materials.

Back 5

Materials quantity variance

Front 6

Standards that allow for normal machine downtime and otehr work interruptions and that can be attained through reasonable, though highly efficient, efforts by the average worker.

Back 6

Practical standards

Front 7

A detailed listing of the standard amounts of inputs that should go into a unit of product, multiplied by the standard price or rate that has been set for each input.

Back 7

Standard cost card

Front 8

The standard cost of a unit of product as shown on the standard cost card; it is computed by multiplying the standard quantity or hours by the standard price or rate for each cost element

Back 8

Standard cost per unit

Front 9

The time that should hae been taken to complete the period's output. It is computed by multiplying the actual number of units produced by the standard hours per unit.

Back 9

Standard hours allowed

Front 10

The amount of labor time that should be required to complete a single unit of product, including allowances for breaks, machine downtime, cleanup, rejects, and other normal inefficiencies

Back 10

Standard hours per unit

Front 11

The price that should be paid for a single unit of a material, including allowances for quality, quantity purchased, shipping, recieving, and other such costs, net of any discounts allowed

Back 11

Standard price per unit

Front 12

The amount of materials that should have been used to complete the period's actual output. It is computed by multiplying the actual number of units produced by the standard quantity per unit.

Back 12

Standard quantity allowed

Front 13

The amount of materials that shoudl be required to complete a single unit of product, including allowances for normal waste, spoilage, rejects, and similar inefficiencies

Back 13

Standard quantity per unit

Front 14

The labor rate that should be incurred per hour of labor time, including employment taxes, fringe benefits, and other such labor costs

Back 14

Standard rate per hour

Front 15

The amount of time required to turn raw materials into completed products

Back 15

Throughput time

Front 16

The difference between the actual level of activity (direct labor-hours, machine-hours, or some other base) and the standard activity allowed, multiplied by the variable part of the predetermined overhead rate.

Back 16

Variable overhead efficiency variance

Front 17

The difference between the actual variable overhead cost incurred during a period and the standard cost that shoudl have been incurred based on the actual activity of the period

Back 17

Variable overhead spending variance

Front 18

The difference between standard prices and quantities on the one hand and actual prices and quantities on the other hand

Back 18

Variance

Front 19

A measure of the difference between the actual fixed overhead costs incurred during the period and budgeted fixed overhead costs as contained in the flexible budget

Back 19

Budget variance

Front 20

The activity figure used to compute the predetermined overhead rate

Back 20

Denominator activity

Front 21

A budget that is designed to cover a range of activity and that can be used to develop budgeted costs at any point within that range to compare to actual costs incurred

Back 21

Flexible budget

Front 22

A budget created at the beginning of the budgeting period that is valid only for the planned level of activity

Back 22

Static budget

Front 23

The variance that arises whenever the standard hours allowed for the output of a period are different from the denominator activity level that was used to compute the predetermined overhead rate

Back 23

Volume variance

Front 24

A fixed cost that supports more than one business segment, but is not traceable in whole or in part to any one of the business segments

Back 24

Common fixed cost

Front 25

A business segment whose manager has control over cost but has no control over revenueor the use of investment funds

Back 25

Cost center

Front 26

An organization in which decision making authority is not confined to a few top executives but rather is sprea throughout the organization

Back 26

Decentralized organization

Front 27

A concept similar to residual income in which a variety of adjustments may be made to GAAP financial statements for performance evaluation purposes

Back 27

Ecomomic Value Added (EVA)

Front 28

A business segment whose manager has control over cost, revenue, and the use of investment funds

Back 28

Investment center

Front 29

Net operating income divided by sales

Back 29

Margin

Front 30

Income before interest and income taxes have been deducted

Back 30

Net operating income

Front 31

Cash, accounts receivable, inventory, plant and equipment, and all other assets held for productive use in an organization

Back 31

Operating assets

Front 32

A business segment whose manager has control over cost and revenue but has no control over the use of investment funds

Back 32

Profit Center

Front 33

The net operating income that an investment center earns above the required return on its operating assets

Back 33

Residual income

Front 34

Any business segment whose manager has control over cost, revenue, or the use of investment funds

Back 34

Responsibility center

Front 35

Net operating income divided by average operating assets. It also equals margin multiplied by turnover

Back 35

Return on investment (ROI)

Front 36

Any part or activity of an organization about which the manager seeks cost, revenue, or profit data

Back 36

Segment

Front 37

A segments contribution margin less its traceable fixed costs. It represents the margin available after a segment has covered all of its own traceable costs

Back 37

Segment margin

Front 38

A fixed cost that is incurred because of the exisistence of a particular business segment and would be eliminated if the segment were eliminated

Back 38

Traceable fixed cost

Front 39

Sales divided by average operating assests

Back 39

Turnover

Front 40

The major business functions that add value to a company's products and services such as research and development, product design, manufacturing, marketing, distribution, and customer service

Back 40

Value Chain