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