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169 Cards in this Set

  • Front
  • Back
Computer-assisted Design (CAD)
Use of computers for designing new products.
Computer-assisted Manufacturing (CAM)
Use of programmable robots to assist in the manufacturing of products.
Computer-integrated Manufacturing (CIM)
A manufacturing plant with all its systems linked by computer networks and databases.
Control Decisions
Use of information to influence members of the organization to make decisions that are consistent with organizational goals.
Controller
The person within an organization responsible for the accounting system.
Customer Value
The benefit received by the customer from a product or service relative to its cost.
Ethics
The process of determining standards and procedures for dealing with judgmental decisions affecting other people.
Financial Accounting
The accounting system used to report to investors, creditors and other interested parties outside the organizations.
Globalization
The integration of national economies into a single international economy.
Internal Auditor
A person within the organization who monitors various divisions and departments of the organization to determine if prescribed operational procedures are being followed.
Just-In-Time (JIT)
Process of providing products and services at the time they are needed.
Management Accounting
The accounting system used within the organization to help the organization achieve its goals.
Non-Value-Added Activities
Activities in an organization that do not benefit the customers of the organization.
Organizational Value
The benefit received by various stakeholders from their investment in the organization.
Performance Measures
Direct or indirect measures of the actions of individuals or groups of individuals within the organization.
Planning Decision
The selection of activities to help the organization attain its goals.
Tax Accounting
The accounting system used to calculate taxable income and report to government taxing authorities.
Stakeholders
Parties that are affected by an organization.
Total Quality Management (TQM)
A philosophy of continually lowering costs and improving the provision of services and products to customers.
Value Chain
The sequence of critical organizational processes to satisfy customers of the organization.
Average Cost
The total costs of production divided by the number of units produced.
Capacity
Measure of constraints on the operation of an organization.
Cost-Benefit Analysis
The process of making decisions by comparing the costs and benefits of alternative choices.
Differential Benefit
The difference in benefits of two alternative decisions.
Differential Cost
The difference in costs of two alternative decisions.
Fixed Cost
The cost of initiating production, which does not vary with the number of units produced.
Marginal Cost
The additional cost of producing one more unit given a certain level of output.
Opportunity Cost
The forgone opportunity of using a resource for another purpose.
Relevant Range
The range of output levels over which variable costs are reasonable approximations of opportunity costs.
Sunk Cost
A cost that has already been incurred and cannot be changed.
Variable Cost
The variable cost per unit times the number of unites produced.
Variable Cost Per Unit
The variable cost per unit is an approximation of the marginal cost using fixed and variable costs.
Activity-Based Costing
A process of identifying activities that cause indirect costs and choosing cost drivers to apply those indirect costs to different products and services.
Activity-Based Management
A process of analyzing the management of the different overhead activities to enable the organization to provide both customer and organizational value by operating more efficiently.
Batch-Level Costs
Indirect costs that are associated with the number of batches of a particular product or service.
Cost Driver
The cause of the cost of an activity.
Cost-Driver Application Rate
The ratio of the total activity cost divided by the total expected usage of the cost driver of the activity.
Cost Object
An item to be costed for decision-making purposes.
Cost of Goods Sold
The historical cost of products sold as reported in the profit and loss statement.
Direct Labor
Labor costs that can be identified with a specific product or service.
Direct Materials
Parts and raw materials of a product.
Direct Product Costs
Costs that can be directly traced to a specific product.
Facility-Level Costs
Indirect costs that are common to multiple products and services.
Indirect Product Costs
Costs that are associated with more than one product.
Overhead Costs
Indirect costs of products or services.
Period Costs
Costs that are associated with periods of tim, rather than products, for reporting to external parties.
Product or Service Cost
The forgone opportunity of using resources to provide a product or service.
Product-Level Costs
Costs associated with a product, but not with a particular unit or batch of the product.
Product-Mix Decision
A decision on the types and proportions of products and services to offer.
Unit-Level Costs
The costs associated with individual units of a product or service.
Activity-Based Costing
A process of identifying activities that cause indirect costs and choosing cost drivers to apply those indirect costs to different products and services.
Activity-Based Management
A process of analyzing the management of the different overhead activities to enable the organization to provide both customer and organizational value by operating more efficiently.
Batch-Level Costs
Indirect costs that are associated with the number of batches of a particular product or service.
Cost Driver
The cause of a cost of an activity.
Cost-Driver Application Rate
The ratio of the total activity cost divided by the total expected usage of the cost driver of the activity.
Cost Object
An item to be costed for decision-making purposes.
Cost of Goods Sold
The historical cost of products sold as reported in the profit and loss statement.
Direct Labor
Labor costs that can be identified with a specific product or service.
Direct Materials
Parts and raw materials of a product.
Direct Product Costs
Costs that can be directly traced to a specific product.
Facility-Level Costs
Indirect costs that are common to multiple products and services.
Indirect Product Costs
Costs that are associated with more than one product.
Overhead Costs
INdirect costs of products or services.
Period Costs
Costs that are associated with periods of time, rather than products, for reporting to external parties.
Product or Service Cost
The forgone opportunity of using resources to provide a product or service.
Product-Level Costs
Costs associated witha product, but not with a particular unit or batch of the product.
Product-Mix Decision
A decision on the types and proportions of products and services to offer.
Unit-Level Costs
The costs associated with individual units of a product or service.
Avoidable Product and Service Costs
Costs that are no longer incurred, if a product or service is dropped.
Bottleneck
The process of an organization that has the least capacity.
Break-Even Analysis
The process of identifying the number of units that must be sold to achieve zero profit.
Contribution Margin Per Unit
The sales price minus the variable cost per unit.
Cost-Volume-Profit (CVP) Analysis
The process of estimating profit assuming constant fixed and variable costs and a constant price over all rates of output.
Theory of Constraints
A process of identifying and managing constraints in organizational activities.
Allocation Base
A characteristic of the cost object used to distribute indirect costs.
Cost Allocation
The distribution of indirect costs among cost objects.
Cost Object
The subject of interest in determining the cost.
Cost Pool
The accumulation of costs related to an indirect activity.
Externality
The effect of a decision on parties other than the contracting parties.
Multi-Stage Cost Allocation
The process of allocating costs to cost objects, followed by the allocation of costs from those cost objects to other cost objects.
Mutual Monitoring
A process of having an organization's members monitor and control each other.
Segment Reporting
A process of developing accounting reports for the separate units of the organization.
Absorption Costing
The inclusion of variable and fixed overhead in the product cost.
Equivalent Units
A measure of production, recognizing partial completion, that is used in process costing to identify work performed during a period of time.
Job-Order Systems
A system of recording costs for a particular job, which could be a single unit or a batch.
Over-Absorbed Overhead
The amount by which applied overhead is greater than actual overhead cost incurred.
Process Cost Systems
A system of determining product costs by dividing total costs by the number of equivalent units produced.
Proration
The process of dividing over- or under-absorbed overhead into finished inventory, cost of goods sold and work-in-process.
Under-Absorbed Overhead
The amount by which applied overhead is less than actual overhad cost incurred.
Death Spiral
The process of dropping products when full cost exceeds price without lowering overhead costs previously allocated to them.
Practical Capacity
The highest rate at which an organization can operate without increasing costs due to congestion.
Variable Costing
Determining product costs based only on the variable cost of making the product. The fixed costs are treated as period costs and written off directly to the profit and loss statement.
Appraisal Costs
Costs related to the identification of defective units before they are shipped to customers.
External Failure Costs
Costs incurred when a customer receives a defective product.
Internal Failure Costs
Costs incurred when a defect is discovered before a customer receives it.
Material Requirement Planning (MRP)
Computer programs that allow organizations to quickly ascertain resource requirements to make a product.
Prevention Costs
Costs incurred in the production process to reduce defects.
Throughput Time
The total time from receipt of an order to the time of delivery.
Benchmarking
The process of comparing an organization's products and activities with those of other organizations to determine best practices.
Incremental Costs
The additional costs of making more units of a product or service.
Lead-Loss Pricing
A strategy of selling a particular product at a price below its cost to lure customers with the hope of selling other products.
Outsourcing
A decision to pay some other organization to perform certain activities.
Predatory Pricing
A strategy of selling a product at a price below its cost to drive out competition.
Product Life Cycle
The stages of supplying a product or service from its initial conception to the satisfaction of the last customer and the product's withdrawal from the marketplace.
Supply Chain Management
The management of relations with other organizations.
Target Costing
A strategic management process beginning with the identification of a market opportunity and the design of a product or service to meet the market opportunity and also make a profit for the organization.
Balanced Scorecard
An articulation of an organization's strategy through a sequence of objectives with a set of performance measures that provide a comprehensive view of the organization by recognizing the goals of shareholders and the satisfaction of customers.
Driver Performance Measures
Input or lead measures of objectives within a balanced scorecard.
Implementation
The step in the decision process to carry out the plans of the organization.
Initiation
The step in the decision process to identify areas of improvement within the organization.
Internal Control System
A system of checks and balances within the organization that helps achieve its goals.
Monitoring
The step in the decision process to make sure that plans are implemented as planned.
Monitoring Costs
The cost of observing members of the organization directly or indirectly.
Outcome Performance Measures
Output measures of objectives in a balanced scorecard.
Performance Measures
A description of how well an individual has performed a task.
Ratification
The step in the decision process to determine whether a proposal is consistent with the goals of the organization.
Controllable Costs
Costs that are affected by a particular manager's decisions.
Controllability Principle
Holding managers responsible for only those decisions for which they are given authority.
Cost Centers
Areas of responsibility within the organization where responsibilities are limited to maximizing output given a certain level of cost, or minimizing cost given a certain level of output.
Investment Centers
Areas of responsibility within the organization where responsibilities include choices affecting costs, revenues and the amount invested in the center.
Opportunity Cost of Capital
The forgone opportunity of using cash for another purpose, such as earning interest in a bank account.
Profit Centers
Areas of responsibility within the organization where responsibilities include choices affecting costs and revenues, but not size of investment.
Relative Performance Measurement
Performance is judged relative to how some comparison group performed.
Residual Income
A performance measure for investent centers that subtracts the opportunity cost of the investment from the profit (excluding interest expense) generated by the assets of the investment.
Responsibility Accounting
The process of recognizing sub-units within the organization, assigning responsibilities to managers in those sub-units, and evaluating the performance of those managers.
Return on Investment (ROI)
A performance measure calculated by dividing the profit (excluding interest expense) from an investment by the size of the investment.
Transfer Pricing
A system of pricing of products and services transferred from one responsibility center to another within the same organization.
Adverse Variances
The amount by which budgeted costs are less than actual costs, or budgeted revenues are greater than actual revenues.
Budget Lapsing
Budgets for one period cannot be used to make expenditures in subsequent periods.
Budgeting
Process of gathering information to assist in making forecasts.
Budgets
Forecasts of future revenues and expenditures which translate organizational goals into financial terms.
Flexible Budgets
Budgets that adjust to some measure of volume.
Favorable Variances
The amount by which budgeted costs are greater than actual costs, or budgeted revenues are less than actual revenues.
Incremental Budgets
Use of last year's budget as a base to make future budgets.
Master Budget
A document that integrates all the estimates from the different departments to establish guidelines and benchmarks for the entire organization.
Participative Budgeting
The preparation of the initial budget forecast by eliciting information from those managers responsible for meeting the budget targets.
Pro-Forma Financial Statements
Financial statements based on forecasted data.
Static Budgets
Budgets that do not adjust for volume.
Strategic Planning
The process whereby managers select the firm's overall objectives and the tactics to achieve those objectives.
Variance
The difference between a budgeted and an actual number (or, the difference between actual and standard costs).
Zero-Base Budgeting
A budgeting process whereby each line item in total must be justified and reviewed each year.
Actual Overhead Costs
Indirect costs actually incurred by the organization.
Actual Usage
The number of times an allocation base actually is used.
Adverse Variance
The result when actual costs are higher than standard costs.
Applied Overhead Costs
The monetary amount of overhead allocated to different products or other cost objects.
Budgeted Overhead Costs
The expected indirect costs used to establish application rates.
Direct Labor Variance
The difference between actual and standard labor costs.
Direct Materials Variance
The difference between actual and standard material costs.
Expected Usage
The number of times an allocation base is expected to be used.
Favorable Variance
The result when actual costs are less than standard costs.
Labor Efficiency Variance
The difference between actual and standard direct labor hours times the standard labor rate.
Labor Rate Variance
The difference between the actual labor rate and the standard rate times the actual hours.
Management by Exception
A management style that focuses management effort on large cost variances.
Material Price Variance
The difference between the actual price and standard price of raw materials times the actual quantity used or purchased.
Material Quantity Variance
The difference between the actual and standard quantity of materials used times the standard price.
Satisficing Behavior
Behavior of employees seeking to achieve satisfactory levels of performance measures but not trying to excel.
Standard Costs
Benchmarks based on expected future costs.
Standard Usage
The number of times a cost driver should have been used given the actual number of units of output.
Target Costing
Choosing a cost goal given a competitive sales price and an expected profit margin.
Total Overhead Variance
The difference between total actual and applied overhead.
Capital Budgeting
A process of evaluating and choosing long-term investments.
Depreciation
The reduction in the historical cost of a fixed asset over time.
Depreciation Tax Shield
The reduction in taxes due to the decrease in taxable earnings from depreciation.
Expected Cash Flow
The expected value of cash flows when cash flows are uncertain and many possible cash flows can result.
Hurdle Rate
A benchmark that the organization establishes as an investment criterion.
Internal Rate of Return (IRR)
The discount rate that makes the net present value of an investment equal to zero.
Net Present Value (NPV)
The net present value of cash flows is calculated by discounting all future cash flows to the present and comparing the present value of the cash inflows with the present value of the cash outflows.
Payback
The time required to generate cash inflows equal to the initial investment.
The hypothetical child of Vladamir Putin and Kevin Spacey.
Gert Paulsson