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119 Cards in this Set
- Front
- Back
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planning
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setting goals and objectives
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directing
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overseeing day-to-day operations
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controlling
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evaluating results of operations
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generate more sales via opening new stores
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planning
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reduce labor costs by reducing store hours
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planning
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creating strategies and budgets
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planning
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using daily/weekly sales reports to adjust marketing strategies
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directing
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using product cost reports to adjust raw material usage
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directing
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comparing budgeted sales with actual sales to take corrective actions
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controlling
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comparing budgeted product costs against actual product costs to take corrective actions
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controlling
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price setting or product offerings
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decision making
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renovation of facilities
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decision making
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operation openings or closings
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decision making
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job is to raise capital
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treasurer
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job is to generate financial and managerial and tax numbers and come up with expansion ideas
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controller
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internal audit reports to
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CFO, CEO, and audit committee under Board of Directors
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professional association for management accountants
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Institute of Management Accountants
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IMA ethical standards (4)
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competence, confidentiality, integrity, credibility
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restored trust in publicly traded corporations, management, financial statements, and auditors
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Sarbanes Oxley Act of 2002
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consistent reporting standards needed worldwide
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International Financial Reporting Standards (IFRS)
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standardized tagging system for financial reports
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Extensible Business Reporting Language (XBRL)
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system that integrates a company's functions, departments, and data
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Enterprise Resource Planning (ERP)
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a philosophy and business strategy of manufacturing without waste
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lean production
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three inventory accounts for manufacturing companies
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raw materials, WIP, and finished goods
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6 activities that add value to products and services and cost money (value chain)
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R&D, design, production, marketing, distribution, customer service
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anything for which managers want a separate measurement of cost
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cost object
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store utilities
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direct, trace
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CEO salary
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indirect, allocate
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cost of product
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direct, trace
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national advertising
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indirect, allocate
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cost of operating corporate payroll dept
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indirect, allocate
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cost of milk purchased from farmers
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product, DM
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lubricants used in bottling machines
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product, MOH
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property tax on processing plant
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product, MOH
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advertisements
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period
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delivery trucks
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period
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wages paid to machine operators at processing plant
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product, DL
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prime costs
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DM + DL
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conversion costs
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DL + MOH
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DM used calculation
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beg RM inv
+ purch of RM + freight-in =materials available for use - end RM inv = DM used |
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things that increase RM inv
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purchases and freight-in
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things that increase WIP inv
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materials used from RM inv
DL MOH |
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COGM calculation
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beg WIP inv
+ DM used + DL used + MOH allocated = TMC - end WIP inv = COGM |
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not an element of the value chain
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administrative costs
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manufacturer of fiberglass insulation
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process costing
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residential plumbing contractor
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job costing
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professional home builder
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job costing
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mass production, similar items, costs averaged over all units
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process costing
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unique, custom products, small batches
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job costing
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POHR calculation
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estimated MOH/estimated cost driver
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allocating MOH calculation
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POHR * amount of cost driver activity
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indirect labor and indirect materials go into
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MOH and are allocated to WIP inventory
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when difference between actual and allocated MOH is material
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portion the difference between WIP, FG, and COGS
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allocates indirect costs to production, focuses on activities and costs of activities, separate allocation rate for each activity
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Activity Based Costing (ABC)
make tables |
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comparing 3 MOH cost allocation systems from least to most accurate
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plantwide---departmental---ABC
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cost driver for material purchasing
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# of purchase orders
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cost driver for material handling
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# of parts
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cost driver for production scheduling
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# of batches to be scheduled
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cost driver for quality inspections
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# of inspections
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cost driver for photocopying
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# of pages copied
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cost hierarchy large to small
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facility---product---batch---unit
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each separate container is cut from the mold once the plastic has cooled and hardened
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unit
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patents are obtained for each new type of container mold
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product
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plastic resins are used as the main DM for the containers
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unit
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a plant manager oversees the entire manufacturing production
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facility
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the sales force incurs travel expenses to attend various trade shows throughout the country to market the containers
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facility but not product cost
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each container product line has a manager
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product
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the extrusion (molding) machine is calibrated for each batch of containers made
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batch
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each type of container has its own unique molds
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product
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routine maintenance is performed on the machines
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facility
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the ratio of function to cost
-can be increased by improving function or cutting the cost |
value
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placing customers who call to order pizza on hold
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non-value added
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assembling pizzas to be delivered to customers
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value added
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storing RM at closing time to be used in pizza production tomorrow
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non-value added
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cost of remaking pizzas that were made incorrectly
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non-value added
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delivering pizzas to customer
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value added
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analyzing costs in value chain decided by..
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CUSTOMER
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cost benefit test
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making sure the benefits of adopting activity based costing and management exceed the costs
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are companies glad they adopted ABC?
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89% of companies say it was worth the cost
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cost system may need repair when..
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lost bids to competitors with lower prices
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keep large inventories on hand, "hopefully sell it"
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push systems
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demand-pull systems, small batches, emphasis on quality
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just in time
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downside of lean production
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vulnerable when problems strike suppliers or distributors
-delays in delivery -personnel problems -recalled products -weather related issues |
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provide customers with superior products and services, continuous improvement, more investment up front to generate savings in the end
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Total Quality Management
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4 types of TQM costs
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prevention, appraisal, internal failure, external failure
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avoid poor quality goods or services from beginning
-employee training -improved materials -preventative maintenance |
prevention
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detect poor quality goods or services
-inspection throughout production -inspection of final product -product testing |
appraisal
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avoid poor quality before delivery to customers
-production loss caused by downtime -rejected product units |
internal failure
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incurred after defective product is delivered
-lost profits from lost customers -warranty costs -service costs at customer sites -sales returns |
external failure
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strength-testing 1 item from each batch of products
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appraisal
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identifying preferred suppliers who commit to on-time delivery of perfect quality materials
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prevention
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during inspection, several defective units found & must be redone
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internal failure
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inspection of incoming RM
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appraisal
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who is most likely to regularly use the managerial accounting info of a firm?
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CFO
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who appoints the CEO?
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board of directors
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who is in charge of the operations in a firm?
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COO
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what is the professional association for managerial accountants?
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IMA
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merchandisers only have one inventory account
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finished goods
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as you produce more units.. total FC
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remain constant
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as you produce more units.. total VC
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increase
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as you produce more units.. FC per unit
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decreases
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as you produce more units.. VC per unit
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remains constant
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as you produce more units.. total costs
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increase
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Selling General and Administrative Expenses
-commissions -rent on HQ -legal fees |
period costs
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in a service company, all costs are ____ costs
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period
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design and research are examples of
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period costs
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period costs are recorded when..
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incurred
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product costs are recorded when..
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product is sold in COGS
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electricity plant uses to run the facility
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MOH
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RM, WIP, and FG are recorded on the..
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balance sheet
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when sold, products are recorded as COGS on the..
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income statement
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freight-in, import duties and tariffs are included in the ___ inventory
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raw materials
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the cost to ship the final product is a ___ cost
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period
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in the value chain, which of the following is the only activity that can include inventoriable costs?
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production
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moved from RM to WIP
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total manufacturing cost
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moved from WIP to FG
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cost of goods manufactured
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left side of MOH t-account
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actual MOH and underapplied
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right side for MOH t-account
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applied/allocated (estimate) MOH and over-applied
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price below cost until other companies out of business, the jack up prices
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predatory pricing
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