Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
33 Cards in this Set
- Front
- Back
|
ABC stands for _____
|
Activity based costing
|
|
|
What does ABC mean?
|
ABC is a system that
(1) Accumulates overhead costs for each of the activities (2) then assigns costs of activities to the products/ services that causes the activities => it is a system that generate costing information for overhead |
|
|
ABC mainly for?
|
Allocate overhead cost or indirect cost in a more accurate manner.
|
|
|
ABM stands for _____
|
Activity based management
|
|
|
What does ABM do?
|
A discipline:
=> analysis the activities in production / performance process => use the results to improve values received by customers and hence increase company's profit. |
|
|
Relationship of ABC & ABM
|
ABM used ABC costing information to improve values of products/ services to customers
|
|
|
What is ABM umbrella?
|
Show all overlap displines in the organization with ABM
such as ABC, Strategic planning, performance evaluation, reengineering etc. |
|
|
How ABM helps managers?
|
Managers can use ABM to
(i)increase values for customers, (ii) and hence increase company's profit b/c ABM can produces much more accurate costing information and improve company's effectiveness and efficiency. |
|
|
What is labour intensive process?
|
little overhead
=> very rarely used machines |
|
|
What is automated process?
|
heavy overhead
=> use mostly machines |
|
|
What is activity?
|
repetitive action that will fulfill a business function
e.g. lift material [verb, noun] |
|
|
What is a process map?
|
list all steps that will take us to produce the product / provide service
|
|
|
Process map can help _____
|
in provide a detail list of activities so that duplicate, waste, and unnecessary work can be identified.
|
|
|
value chart
|
one kind of process map.
It show detail time spent for all the value added and non-value added activities from the beginning till the end of the process |
|
|
value added activity
|
increase worth of the product or service to customers and which they are willing to pay for
|
|
|
Define non-value added activity
|
increase time spent on production but value received from customers will not be affected
e.g. moving & waiting |
|
|
What is value added processing times?
|
time spent to perform a function that is require in production of products
|
|
|
What is value added service time?
|
time spent to perform all necessary service functions for a customer
|
|
|
Non-value added activity include
|
transfer time, idle time, inspection time, NVA production/performance time
|
|
|
transfer time
|
move things from one place to another
|
|
|
idle time
|
waiting time in production or product storage time
|
|
|
What non-value added activities are hard to remove for most company?
|
transfer time and idle time
|
|
|
inspection time
|
time spent on inspecting products
=> this is NVA b/c if we can control a high quality of the products we don't need to spend time on inspection. So, it does not add value on product itself => for |
|
|
business value added activity
|
activity require to run the business but customers do not want to pay for.
e.g. auditing |
|
|
cycle time
|
total time from customer send an order till the product/service delivered
OR under full service approach, the end point is when the product/service delivered to the market |
|
|
NVA activities usually caused by _____, _____, ____
|
systemic, physical, and human factors
|
|
|
NVA can or cannot 100% removed?
|
No.
|
|
|
What is JIT?
|
Just in time system is a philosophy that perform production, purchasing, and delivery products only when needed
|
|
|
How JIT used at Dell?
*4-points: suppliers, arrange of manufacturing plan, lift-tools, no inspection time or effort. |
(1)Arrange manufacturing plan in a smooth and automated way: WIP products will move smoothly from one dept. to another.
(2) Used hydraulic tools to lift in-process materials between production; reduce 50% time contact by human; reduct damaged and reworked rate. (3) No time or effort spent on inspection; maintain 0-defective rate by regular audit and diagnostic test => reduce cycle time (4) consolidated with many suppliers to form a single logistics centre which is managed by third party; allow one truck to deliver multiple parts; |
|
|
What is cost driver?
|
factors that have direct cause and effect relationships to costs
|
|
|
How cost driver to be selected?
|
should be easy to understand; directly related to activity perform;
|
|
|
How many cost drivers should be chosen?
|
More the better; more accurate; but it requires a high cost to accumulate the data so we should choose them at the cost-benefit method
|
|
|
What is a cost pool?
|
A group of indirect costs using a "single activity"
|
