Planning Control Analysis

Front 1

Cost Volume Profit Analysis

Back 1

a planning tool used to analyze the effects of changes in volume, sales mix, selling price, variable expenses, etc.

Front 2

Variable(Direct) Costing

Back 2

considers all fixed manufacturing overhead as a period cost rather than as a product cost.

Front 3

Absorption(Full) Costing

Back 3

considers all fixed MOH to be a product cost.

Front 4

Budget

Back 4

is a quantification of the plan for operations.

Front 5

Flexible Budget

Back 5

is a budget that is adjusted for changes in volume.

Front 6

Performance Reports

Back 6

compare budgeted and actual performance.

Front 7

Master budget

Back 7

a comprehensive expression of management's operating and financial plans for a future period that is summarized as budgeted financial statements. Operating and Financial Budgets.

Front 8

Operating Budget

Back 8

is the budgeted income statement and the related schedules.

Front 9

Financial Budget

Back 9

is the cash budget, the capital budget, the budgeted balance sheet, and the budgeted statement of cash flows.

Front 10

Budgetary Slack

Back 10

is the practice of underestimating revenues and overestimating expenses to make budgeted targets more easily achievable.

Front 11

Responsibility Accounting

Back 11

measures subunit performance based on the costs and revenues assigned to responsibility centers.

Front 12

Controllable Costs

Back 12

can be affected by a manager during the current period. Cannot be affected by the individual question.

Front 13

Contribution Margin

Back 13

Revenues-Variable Costs

Front 14

Target Costing

Back 14

identifies the estimated cost of a new product that must be achieved for that product to be priced competitively and still produce an acceptable profit.

Front 15

Transfer Pricing

Back 15

is the determination of the price at which goods and services will be "sold" to profit or investment centers via internal company transfers.

Front 16

Standard Costs

Back 16

are predetermined target costs.

Front 17

Variances

Back 17

are differences between standards and actual results.

Front 18

Management by exception

Back 18

focuses on material deviations from plans while allowing areas operating as expected to continue to operate without inference.

Front 19

Top down mandated approach

Back 19

upper level mangagement establishes the budget parameters and it is passed down through the organization to each operating unit.

Front 20

Advantages/Disadvantages of top down mandated approach

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1)Advantages-include quick preparation time and clear communication of mgt's objectives.
2)low level employees view it as dictatorial.

Front 21

Participative Bottom up approach

Back 21

driven by involving lower level management and employees.

Front 22

Advantages/Disadvantages of Bottom up approach

Back 22

Adv
1)employees are more readily to accept budget, morale may be improved.
Dis
1)Process is time consuming, and managers may try to pad their budgets.

Front 23

Many budgets are prepared using

Back 23

a blended approach of top down and bottom up.

Front 24

Capital Budget

Back 24

displays the financial effects of purchases and retirements of long lived assets.

Front 25

Kaizen budgeting

Back 25

projects costs on the basis of improvements yet to be implemented rather than upon current conditions. Will not be achieved unless improvements are finally made.

Front 26

Activity Based Budgeting

Back 26

focuses on costs of acitivities necessary for production and sales. Operating budgets are formulated for each activity.

Front 27

Delphi Technique

Back 27

qualatative method, used to develop forecasts. Uses a series of questionnaires and iterative process.

Front 28

Naive Models

Back 28

quantative method, based on historical observation of sales or other variables.

Front 29

Moving Average

Back 29

quantative method. Uses the average of sales for the most recent periods to predict the next periods sales.

Front 30

Exponential Smoothing

Back 30

quantative method, more recent data than moving average.

Front 31

Decomposition of Time

Back 31

quantative method, used when sales or seasonal or cyclical in nature.

Front 32

Markov Techniques

Back 32

these techniques attempt to forecast consumer purchasing by considering factors such as brand loyalty and brand switching behavior.

Front 33

Regression Analysis

Back 33

y=a+bx
y=dependent variable
a=the constant value
b=the slope of the regression
x=the independent variable

Front 34

Goodness of Fit

Back 34

measures how well the predicted values of the dependent variable match the actual amounts.

Front 35

Cost Center

Back 35

when a manager is responsible for costs, his/her area of responsibility.

Front 36

Profit Center

Back 36

if a manager is responsible for both revenues and costs.

Front 37

Investment Center

Back 37

if the manager is responsible for revenues, costs, and asset investment.

Front 38

Contribution Margin Approach

Back 38

considers all relevant variable costs plus any additonal fixed costs needed to sustain the new production level.

Front 39

Cost-Plus Pricing

Back 39

is one model for the pricing decision. Prices are set at variable costs plus a percentage markup, at full manufacturing cost plus a percentage markup, or at target ROI per unit.

Front 40

Target Pricing

Back 40

sets prices at the amount that consumers are willing to pay based on their perceived value of the product or service.

Front 41

Value Engineering

Back 41

examines all comonents of the value chain to find opportunities for imporvements and cost reduction.