Acct 200 Final Bitches

Front 1

Standard Cost

Back 1

budget for production of one unit

Front 2

Total Standard cost

Back 2

unit standard cost X actual output

Front 3

Variance

Back 3

Actual Cost vs. standard cost

Front 4

Direct Material Price Variance

Back 4

DMPV=PQ(AP-SP)

Front 5

Direct Material Quantity Variance

Back 5

DMQV=SP(AQ-SQ)

Front 6

Direct Labor Rate Variance

Back 6

DLRV=AH(AR-SR)

Front 7

Direct Labor Efficiency Variance

Back 7

DLEV=SR(AH-SH)

Front 8

Unfavorable and Favorable Variances

Back 8

Favorable is negative

Front 9

Controllable

Back 9

Cost Item that manager has ability to control

Front 10

DM Price Variance(Who controls)

Back 10

Controlled by Manager

Front 11

DM Quantity Variance(Who controls)

Back 11

Controlled by Production first, then Purchasing if quality concerns

Front 12

DL Rate Variance(Who controls)

Back 12

Controlled by Production Supervisor and HR

Front 13

DL Efficiency Variance(Who controls)

Back 13

Controlled by Production supervisor

Front 14

Balanced Scorecard Financial Performance MEasures

Back 14

growth; cash flow, ROI, etc.

Front 15

Balanced Scorecard non-financial performance measures

Back 15

customer perspective, internal ops., innovation and learning

Front 16

Static Budget

Back 16

based on single planned level of activity

Front 17

Flexible Budget

Back 17

plan to control overhead costs for wide range of activity levels(Based on standard input in production process)

Front 18

Goal Congruence

Back 18

Managers of subunits throughout organization strive to achieve goals set by top management

Front 19

Cost Center Responsibility

Back 19

manager has control over costs of subunits

Front 20

Revenue Center Responsibility

Back 20

Manager accountable for revenue of subunit

Front 21

Profit center responsibility

Back 21

manager accountable for revs and expenses

Front 22

Investment Center Responsibility

Back 22

manager accountable for profit and invested capital of subunit

Front 23

Prevention Costs

Back 23

Before Production-Quality Training

Front 24

Appraisal Costs

Back 24

During Production-Materials inspections

Front 25

Internal Failure Costs

Back 25

Prior to Sale-Rework, Scrap

Front 26

External Failure Costs

Back 26

After sold, Warranty Costs, customer complaints

Front 27

Decentralization

Back 27

managers throughout organization given power to make decisions for their subunit

Front 28

Responsibility center accounting

Back 28

incentives for managers of subunits to achieve organizational goals

Front 29

ROI

Back 29

ROI=Income/invested capital or

income/sales rev X sales rev/invested capital

sales margin X capital turnover

Front 30

Residual Income

Back 30

Residual Income=profit-(invested cap X imputed interest rate)

Front 31

Transfer pricing general rule

Back 31

TP= Additional outlay cost/unit + Opportunity Cost

Front 32

Transfer Pricing w/ no excess capacity

Back 32

TP= VC/unit + Opportunity cost (forgone CM)

Front 33

Transfer Pricing excess capacity

Back 33

TP= VC/unit + 0 opportunity cost

Front 34

Transfer pricing rules

Back 34

-when no excess capacity TP= external market price
-max price internal buyer will pay is external price
-min price seller will sell to internal division is VC

Front 35

Sunk Cost

Back 35

irrelevant, incurred in past and can't be changed

Front 36

opportunity cost

Back 36

relevant, potential benefit given up by choosing other alternative

Front 37

differential cost

Back 37

relevant, difference in cost between two alternatives

Front 38

Special Offer

Back 38

FC usually irrelevant

Front 39

Special offer with excess capacity

Back 39

Rev from special offer- VC of special offer= CM of special offer

Front 40

Special offer with no excess capacity

Back 40

Rev from special offer-VC of special offer-opportunity cost=CM of special offer

Front 41

Outsource-MAke/Buy

Back 41

FC that don't change are irrelevant

Front 42

Outsource

Back 42

(VC if make + FC if make)-(VC if buy(0) + FC if Buy+ purchase price)

Front 43

Joint Products

Back 43

-joint costs are irrelevant
-relevant costs are incremental rev and seperable processing costs

Front 44

Joint Products equation

Back 44

(REV after further processing-Rev @ split off) less costs after further processing

Front 45

Limited Resources

Back 45

1. Determine CM per unit=Sales price per unit - VC per unit
2. Determine CM per scarce resource= CM per unit/Scarce resource per unit