Manag Acct Ch 5

Front 1

Activities that are performed each time a unit is produced; variable with output

Back 1

Unit-level activities

Front 2

Activities not performed each time a unit is produced

Back 2

Nonunit-level activities

Front 3

Factors that measure consumption of activities by products and other cost objects; can be classified as unit-level or nonunit-level

Back 3

Activity drivers

Front 4

Measures consumption of unit-level activities

Back 4

Unit-level activity driver

Front 5

Measures consumption of nonunit-level activities by products and cost objects

Back 5

Nonunit-level activity driver

Front 6

Means that products consume OH activities in systematically different proportions; ie product size, complexity, s/u time, batch size, etc.

Back 6

Product diversity

Front 7

Amt of activity driver per product / total driver quantity

Back 7

Consumption ratio (activity rate)

(ABC-most accurate)

Front 8

Total OH costs / total DL hrs

Back 8

OH

(Functional-based product costing-plantwide)

Front 9

Avg consumption ratio X total cost of each set of activities

Back 9

OH cost (Product-costing)

Front 10

Action taken by equipment or people for other people

Back 10

Activity

Front 11

Common rule of thumb for interviewer in gathering info for activity dictionary

Back 11

Disregard activities that require less than 5% of employee’s time

Front 12

List of activities in an org along with some critical activity attributes; financ and nonfinanc

Back 12

Activity dictionary

Front 13

System-wide integrated mgmt approach that focuses attention to activities with the object of improving customer value and profit earned by providing this value

Back 13

Activity-based mgmt

Front 14

Identifies amount of labor consumed by each activ and is derived from the interview process

Back 14

Work distribution matrix

Front 15

Focuses on cost reduction instead of cost assignmt and emphasizes maximization of systemwide performance; concerned with 1)driver analysis, 2)activity analysis, 3)performance measurement

Back 15

Process-value analysis

Front 16

Resources consumed by the activity in producing output; “causes”

Back 16

Activity inputs

Front 17

Result or product of an activity

Back 17

Activity output

Front 18

Number of times activity is performed

Back 18

Activity output measure

Front 19

Effort expended to identify those factors that are root causes of activity costs

Back 19

Driver analysis

Front 20

Process of identifying, describing and evaluating the activities an org performs; eliminates all unnec activities while increasing efficiency of the necess activities

Back 20

Activity analysis

Front 21

Activity analysis produces 4 outcomes:

Back 21

What activit are done

How many perform the activit

Time and resources required for activit

Assess value of activities

Front 22

Activities necessary to remain in business; some mandated

Back 22

Value-added activities

Front 23

Activity is value-added if it satisfies all of these:

Back 23

1) Activity produces state of change

2) Change wasn’t doable by preceding activity

3) Activity enables other activities to be performed

Front 24

Costs to perform value-added activities with perfect efficiency

Back 24

Value-added costs

Front 25

All activities other than those absolutely essential to remain in business

Back 25

Nonvalue-added activities

(Inspection, rework, reorder parts, scheduling, moving, wait,storage, etc.)

Front 26

Costs caused by nonvalue-added activities or inefficient performance of value-added activities

Back 26

Nonvalue-added costs

Front 27

Cost reduction that focuses on nonvalue-added activities

Back 27

Activity elimination

Front 28

Cost reduction that involves choosing among diff sets of activities that are caused by competing strategies

Back 28

Activity selection

Front 29

Cost reduction that decreases the time and resources required by an activity

Back 29

Activity reduction

Front 30

Cost reduction that increases efficiency of necessary activities by using economies of scale

Back 30

Activity sharing

Front 31

Measures of activity performance focus on 3 major levels:

Back 31

Efficiency- relate input/output

Time-reduce cycle time

Quality-do activity right 1st time

Front 32

2 operational measures of time it takes for a firm to respond

Back 32

Cycle time

Velocity

Front 33

Length of time it takes to produce unit of output from receipt of raw materials til good is delivered to FG;

Formula- time/units produced

Back 33

Cycle time

Front 34

Number of units produced in a given time period;

Formula- units produced/time

Back 34

Velocity