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246 Cards in this Set
- Front
- Back
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Abnormal Spoilage
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Spoilage resulting from unusual circumstances, including improper handling, poorly trained employees, faulty equipment, and so on.
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Absorption (full) Costing
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A method of costing in which product costs include direct material, direct labor, and fixed and variable overhead; required for external financial statements and for income tax reporting.
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Accounting Information System (AIS)
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A transaction processing system that captures financial data resulting from accounting transactions within a company.
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Accounts Receivable Turnover Ratio
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One of the best measures of the efficiency of the collection process. Accounts Receivable Turnover Ratio = Net credit sales / Average accounts receivable.
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Activities
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Procedures or processes that cause work to be accomplished.
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Activity-Based Costing (ABC)
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A system of allocating overhead costs that assumes that activities, not volume of production, cause overhead costs to be incurred.
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Activity-Based Management (ABM)
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A system that focuses on managing activities to reduce costs and to make better decisions.
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Actual Costing
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A product costing system in which actual overhead costs are entered directly into work in process.
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Allocation
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The process of finding a logical method of assigning overhead costs to the products or services a company produces or provides.
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Annuity
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A series of cash flows of equal amount paid or received at regular intervals.
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Appraisal (detection) Costs
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Costs incurred to inspect finished products or products in the process of production.
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Asset Turnover
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The measure of activity used in the ROI calculation; it measures the sales that are generated for a given level of assets. Asset Turnover = Sales / Average operating assets.
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Backflush Costing
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A costing system in which manufacturing costs are directly flushed into cost of goods sold instead of flowing through inventory.
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Balanced Scorecard
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An approach to performance measurement that uses a set of financial and nonfinancial measures that relate to the overall strategy of the organization.
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Batch-level Costs
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Costs that are incurred each time a batch of goods is produced.
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Bottlenecks
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Production-process steps that limit throughput or the number of finished products that go through the production process.
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Break-even Point
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The level of sales at which contribution margin just covers fixed costs and net income is equal to zero.
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Budget Variance
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The difference between the amount of fixed overhead actually incurred and the flexible budget amount; also known as the spending variance.
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Budgets
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Plans dealing with the acquisition and use of resources over a specified time period.
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Capital Investment Decisions
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Long-term equipment and the acquisition or expansion of facilities used in a business.
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Cash Disbursements Budget
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Used to project the amount of cash to be disbursed during the budget period.
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Cash Equivalent
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An item that can be readily converted to a known amount of cash and has an original maturity to the investor of three months or less.
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Cash Flow Adequacy
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A measure of cash available to meet future debt obligations
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Cash Flow From Operations to Capital Expenditures Ratio
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A measure of a company's ability to use cash flow from operations to finance the acquisition of property, plant, and equipment. Ratio = (Cash flow from operations - Total dividends paid) / Cash Paid for acquisitions
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Cash Receipts Budget
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Used to project the amount of cash expected to be received from sales and cash collections from customers.
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Cash-to-Cash Operating Cycle Ratio
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A measure of the length of time between the purchase of inventory and the eventual collection of cash from sales. Ratio = Number of days in inventory / number of days in receivables.
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Common Costs
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Indirect Costs that are incurred to benefit more than one segment and cannot be directly traced to a particular segment or allocated in a reasonable manner.
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Common-size Financial Statements
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Statements in which all items have been restated as a percentage of a selected item on the statements.
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Compound Interest
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Interest on the invested amount plus interest on previous interest earned but not withdrawn.
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Constraint
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A restriction that occurs when the capacity to manufacture a product or to provide a service is limited.
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Contribution Margin Per Unit
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The sales price per unit of product less all variable costs to produce and to sell the unit of product; used to calculate the change in contribution margin resulting from a change in unit sales.
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Contribution Margin Ratio
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The contribution margin divided by sales; used to calculate the change in contribution margin resulting from a dollar change in sales.
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Control
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Involves ensuring that the objectives and goals developed by the organization are being attained; often involves a comparison of budgets to actual performance and the use of budgets for performance evaluation purposes.
Involves the motivation and monitoring of employees and the evaluation of people and other resources used in the operations of the organization. |
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Controlling Activities
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The motivation and monitoring of employees and the evaluation of people and other resources used in the operations of the organization.
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Corporate Governance
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Systems used by a company to promote "corporate fairness, transparency, and accountability."
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Cost Behavior
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How costs react to changes in production volume or other levels of activity.
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Cost Center
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An organizational segment, or division, in which the manager has control over costs but not over revenue or investment decisions.
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Cost Drivers
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Factors that cause, or drive, the incurrence of costs.
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Cost of Capital
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What the firm would have to pay to borrow (issue bonds) or raise funds through equity (issue stock) in the financial marketplace.
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Cost Leadership Strategy
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A strategy used when a company's goal is to provide the same or better value to customers at a lower cost than its competitors.
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Cost Pools
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Groups of overhead costs that are similar; used to simplify the task of assigning costs to products using ABC costing.
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Cost-plus Pricing
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A method of pricing in which managers determine the cost of the product or service and then add a markup percentage to that cost to arrive at the sales price.
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Cost-volume-profit (CVP) Analysis
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A tool that focuses on the relationship between a company's profits and (1) the prices of products or services, (2) the volume of products or services, (3) the per unit variable costs, (4) the total fixed costs, and (5) the mix of products or services produced.
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Current Ratio
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A measure of an entity's liquidity; also known as working capital ratio. Current ratio = Current Assets / Current Liabilities
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Customer Relationship Management (CRM)
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Designed to bring a company closer to its customers in order to serve them better.
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Customer Response Time
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The time it takes to deliver the product or service after the order is received.
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Data
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Reports, such as financial statements, customer lists, inventory records, and so on.
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Data Mining
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A process of searching for and extracting information from data.
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Data Warehouses
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Central depositories for electronic data
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Decentralized Organization
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An organization in which decision-making authority is spread throughout the organization.
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Decision Making
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The process of identifying alternative courses of action and selecting an appropriate alternative in a given decision-making situation.
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Dependent Variable
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The variable in regression analysis that is dependent on changes in the independent variable.
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Depreciation Tax Shield
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The tax savings from depreciation.
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Debt Service Coverage Ratio
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A measure of the amount of cash generated by operating activities that is available to repay principal and interest in the upcoming year. Ratio = Cash flow from operations before interest and taxes / Interest and principal payments.
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Debt-to-equity Ratio
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A solvency measure focusing on the amount of capital provided by creditors. Ratio = Total liabilities / Total stockholder's equity.
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Direct Labor
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Labor that can easily and conveniently be traced to particular products.
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Direct Labor Budget
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Used to project the dollar amount of direct labor cost needed for production.
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Direct Materials
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Materials that can easily and conveniently be traced to the final product.
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Direct Method
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A method of allocating service department costs that allocates costs directly to producing departments; reports cash collected from customers and cash paid for inventory, salaries, wages, and so on.
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Discount Rate
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Used as a hurdle rate, or minimum rate of return in calculations of the time value of money; adjusted to reflect risk and uncertainty.
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Diverse Products
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Products that consume resources in different proportions.
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Earnings Per Share (EPS)
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A key measure of performance that is often used to compare companies of different size. EPS = (Net income - Preferred dividends) / Average number of common shares outstanding.
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Economic Value Added (EVA)
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A contemporary measure of performance focusing on shareholder wealth. EVA = After-tax operating profit - [(Total assets - Current liabilities) * Weighted average cost of capital].
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Elastic Demand
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A price increase (decrease) of a certain percent lowers (raises) the quantity demanded by more than that percentage.
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Electronic Data Interchange (EDI)
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The electronic transmission of data, such as purchase orders and invoices.
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Enterprise Resource Planning (ERP) Systems
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Systems used to collect, organize, report, and distribute organizational data and transform that data into critical information and knowledge. Used to collect, organize, report, and distribute data from all aspects of a company's business and to transform that data into useful knowledge.
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Enterprise Risk Management (ERM)
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Enterprise risk management is a process, effected by an entity's board of directors, management, and other personnel, applied in strategy setting and across the enterprise. It is designed to identify potential events that may affect the entity and manage risk to be within the entity's risk appetite, in order to provide reasonable assurance regarding the achievement of entity objectives.
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Environmental Costs
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The costs of producing, marketing, and delivering products and services--including any postpurchase costs caused by the use and disposal of products--that may have an adverse affect on the environment.
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Equivalent Units
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The number of finished units that can be made from the materials, labor, and overhead included ion partially completed units.
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Ethics Programs
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Programs established to help maintain an ethical business environment. Common elements of ethics programs include written codes of ethics, employee hotlines, ethics call centers, ethics training, processes to register anonymous complaints about wrongdoing, and ethics offices.
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External Failure Costs
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Costs incurred when a defective product is delivered to a customer.
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External Linkages
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Relationships between a company's own value-chain activities and those of its suppliers and customers.
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External Users
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Stockholders, potential investors, creditors, government taxing agencies and regulators, suppliers and customers.
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Facility-level Costs
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Costs that are incurred to sustain the overall manufacturing process.
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Finance Function
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It is responsible for managing the financial resources of the organization.
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Financial Accounting
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The area of accounting primarily concerned with the preparation of general-use financial statements for use by creditors, investors, and other users outside of the company (external users).
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Financing Activities
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Includes cash flows from selling or purchasing capital stock, long-term borrowing, and contributions from owners.
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Finished-goods Inventory
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Inventory of finished product waiting for sale and shipment to customers.
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Fixed Costs
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Costs that remain the same in total when production volume increases or decreases but vary per unit.
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Flexible Budget Variance
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The difference between the flexible budget operating income and actual operating income.
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Flexible Budgets
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Take differences in spending owing to volume differences out of the analysis by budgeting for labor (and other costs) based on the actual number of units produced.
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Focusing Strategy
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A strategy involving selecting or emphasizing a market or customer segment in which to compete.
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Fraud
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A knowingly false representation of a material fact made by one party with the intent to deceive and induce another party to justifiably rely on the fact to his or her detriment.
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Fraud Triangle
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Three forces typically contribute to fraudulent behavior: situational pressures and incentives, opportunities, and personal characteristics and attitudes.
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Fraudulent Financial Reporting
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The intentional misstatement of or omission of material, very significant, information from a company's financial statements.
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Fringe Benefits
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Payroll costs in addition to the basic hourly wage.
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Gross Profit
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The difference between sales and cost of goods sold.
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Hejunka
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A system of standardizing manufacturing processes to improve efficiency.
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Horizontal Analysis
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When financial statements are analyzed over time.
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Human Resource Function
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It is concerned with the utilization of human resources to help an organization reach its goals.
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Ideal Standard
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A standard that is attained only when near-perfect conditions are present.
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Idle Time
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Worker time that is not used in the production of the finished product.
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Independent Variable
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The variable in regression analysis that drives changes in the dependent variable.
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Indirect Labor
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Labor used in the production of products but not directly traceable to the specific product.
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Indirect Materials
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Materials used in the production of products but not directly traceable to the specific product.
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Indirect Method
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Starts with net income and removes the impact of noncash items and accruals.
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Inelastic Demand
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Demand is not greatly affected by an increase or decrease in price.
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Information
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Data that have been organized, processed, and summarized.
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Internal Control
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Policies and procedures that provide reasonable assurance that a company's goals and objectives will be achieved.
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Internal Failure Costs
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Costs incurred once the product is produced and then determined to be defective.
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Internal Linkages
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Relationships among activities that are performed within a company's portion of the value chain.
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Internal Rate of Return (IRR)
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The actual yield, or return, earned by an investment.
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Internal Users
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Includes individual employees as well as teams, departments, regions, and top management of an organization; internal users are often just referred to as managers.
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Inventory Turnover Ratio
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A measure of the number of times the value of inventory is sold in one year. Ratio = COGS / Average inventory.
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Investing Activities
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Include the purchase and sale of property, plant, and equipment; the purchases and sales of securities; and loans made as investments.
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Investment Center
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An organizational segment, or division, in which the manager has control over costs, revenue, and investment decisions.
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ISO 9000
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A set of guidelines for quality management focusing on the design, production, inspection, testing, installing, and servicing of products, processes, and services.
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Job Costing
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A costing system that accumulates, tracks, and assigns costs for each job produced by a company.
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Just-in-time (JIT) Manufacturing
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The philosophy of having raw materials arrive just in time to be used in production and for finished-goods inventory to be completed just in time to be shipped to customers.
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Kaizen
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A system of improvement based on a series of gradual and often small improvements.
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Kiting
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The transfer of money from one bank account to another near the end of a reporting period with the intention of overstating the cash balance.
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Knowledge
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Information that is shared and exploited so that it adds value to an organization.
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Knowledge Warehouses
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Used to store and provide access to a wide variety of qualitative data.
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Lapping
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A scheme accomplished by stealing, and not recording, the cash received from one customer and covering the shortage with cash received from another customer.
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Lean Production
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A system focused on eliminating waste associated with holding more inventory than required, making more product than is needed, overprocessing a product, moving products (and people) further than required, and waiting.
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Life-cycle Costing
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Includes all the costs incurred throughout a product's life, not just in the manufacturing and selling of the product.
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Liquidity
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A measure of the ability of a company to meet its immediate financial obligations.
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Make-or-buy Decisions
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Short-term decisions to outsource labor or purchase components used in manufacturing from another company rather than to provide services or to produce components internally.
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Management By Exception
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The process of taking action only when actual results deviate significantly from planned results.
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Managerial Accounting
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The area of accounting primarily concerned with generating financial and nonfinancial information for use by managers in their decision-making roles within a company (internal users).
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Manufacturing Companies
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Companies that purchase raw materials from other companies and transform those raw materials into finished product.
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Manufacturing Costs
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Costs incurred in the factory or plant to produce a product; typically consists of three elements: direct materials, direct labor, and manufacturing overhead.
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Manufacturing Overhead
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Indirect material and labor and any other expenses related to the production of products but not directly traceable to the specific product.
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Manufacturing Overhead Budget
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Used to project the dollar amount of manufacturing overhead needed for production.
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Manufacturing-cycle Efficiency (MCE)
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The value-added time in the production process divided by the throughput, or cycle, time.
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Manufacturing-cycle Time
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The total time a product is in production, which includes process time, inspection time, wait time, and move time; cycle time will include both value-added and non-value-added time.
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Margin
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For each sales dollar, the percentage that is recognized as net profit.
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Marketing Function
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It is involved with the process of developing, pricing, promoting and distributing goods and services sold to customers.
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Master Budget
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Consists of an interrelated set of budgets prepared by a business.
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Material Purchases Budget
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Used to project the dollar amount of raw material purchased for production.
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Merchandising Companies
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Companies that sell products that someone else has manufactured.
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Misappropriation of Assets
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The theft of a company's assets.
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Mixed Costs
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Costs that include both a fixed and a variable component, making it difficult to predict the behavior of a mixed cost as production changes unless the cost is first separated into its fixed and variable components.
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Net Operating Income
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Net income from operations before interest and taxes.
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Net Present Value (NPV)
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A technique for considering the time value of money whereby the present value of all cash inflows associated with a project is compared with the present value of all cash outflows.
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Nonmanufacturing Costs
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Costs that include selling and administrative costs.
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Non-value-added Activities
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Activities that can be eliminated without affecting the quality or performance of a product.
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Normal Costing
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A method of costing using an estimate of overhead and predetermined overhead rates instead of the actual amount of overhead.
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Normal Spoilage
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Spoilage resulting from the regular operations of the production process.
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Operational Activities
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Involves the day-to-day activities undertaken as a product is manufactured or a service is provided.
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Operational Planning
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The development of short-term objectives and goals (typically achieved in less than one year).
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Operating
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Involves day-to-day decision making by managers, which is often facilitated by budgeting.
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Operating Activities
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The day-to-day operations of a business; include acquiring and selling products in the normal course of business.
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Operating Assets
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Typically include cash, accounts receivable, inventory, and property, plant, and equipment needed to operate a business.
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Operating Budgets
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Used to plan for the short term (typically one year or less).
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Operating Leverage
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The contribution margin divided by net income; used as an indicator of how sensitive net income is to the change in sales.
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Operations and Production Function
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It produces the products of services that an organization sells to its customers.
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Operations Costing
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A hybrid of job and process costing; used by companies that make products in batches.
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Opportunity Costs
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The benefits forgone by choosing one alternative over another.
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Organizational Activities
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Involves decisions concerning how a company is organized and how decisions are made within the company.
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Overapplied Overhead
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The amount of applied overhead in excess of actual overhead.
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Overtime Premiums
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An additional amount added to the basic hourly wage owing to overtime worked by the workers.
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Participatory Budgeting
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A budgeting process that starts with departmental managers and flows up through middle management and then to top management. Each new level of management has responsibility for reviewing and negotiating any changes in the proposed budget.
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Payback Period
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The length of time needed for a long term project to recapture, or pay back, the initial investment.
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Penetration Pricing
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The pricing of a new product at a low initial price to build market share quickly or to establish a customer base.
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Performance Report
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Provides key financial and nonfinancial measures of performance for a particular segment.
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Period Costs
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Costs that are expensed in the period incurred; attached to the period as opposed to the product.
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Planning
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The development of both the short-term (operational) and the long-term (strategic) objectives and goals of an organization and an identification of the resources needed to achieve them. The cornerstone of good management; involves developing objectives and goals for the organization, as well as the actual preparation of budgets.
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Practical Standard
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A standard that should be attained under normal, efficient operating conditions.
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Predatory Pricing
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Setting prices below cost for the purpose of injuring competitors and eliminating competition.
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Predetermined Overhead Rates
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Used to apply overhead to products; calculated by dividing the estimated overhead for a cost pool by the estimated units of the cost driver.
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Preference Decisions
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Decisions that involve choosing between alternatives.
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Present Value (PV)
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The amount of future cash flows discounted to their equivalent worth today.
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Prevention Costs
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Costs incurred to prevent product failures from occurring, typically related to design and engineering.
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Price Discrimination
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Charging different prices to different customers with no justification based on the competitive situation or identifiable cost savings.
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Price/Earnings (P/E) Ratio
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A measure of the current price of a company's stock in comparison to its earnings. Theoretically, the P/E ratio tells us something about how investors think a company's stock will perform in the future compared to other companies. Ratio = Current market price / EPS
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Price Gouging
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Setting prices higher for unusual situations.
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Price Skimming
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Charging a higher price when a product or service is first introduced.
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Price Variance
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The difference between the actual price and the standard prices times the actual volume purchased.
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Pro Forma Financial Statements
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Budgeted financial statements that are sometimes used for internal planning purposes but more often are used by external users.
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Process Costing
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A costing system that accumulates and tracks costs for each process performed and then assigns those costs equally to each unit produced.
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Product Costs
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Costs that attach to the products as they go through the manufacturing process; also called inventoriable costs.
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Product Differentiation Strategy
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A strategy used when a company's goal is to distinguish the product or service offered by a company from those of its competitors.
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Product-level Costs
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Costs that are incurred as needed to support the production of each type of product.
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Production Budget
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Used to forecast how many units of product to produce in order to meet the sales projections.
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Productivity
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A measure of the relationship between outputs and inputs
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Profit Center
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An organizational segment, or division, in which the manager has control over both costs and revenue but not investment decisions.
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Profitability Index (PI)
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Calculated by dividing the present value of cash inflows by the initial investment.
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Qualitative
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Deals with nonnumerical attributes or characteristics.
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Quality
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Usually defined as meeting or exceeding customer's expectations.
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Quantitative
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Can be expressed in terms of dollars or other quantities (units, pounds, etc.)
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Quick Ratio
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A strict test of a company's ability to pay its current debts with highly liquid current assets. Ratio = Quick assets / Current liabilities.
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R Square
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A measure of goodness of fit (how well the regression line "fits" the data).
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Raw Materials Inventory
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Inventory of materials needed in the production process but not yet moved to the production area.
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Regression Analysis
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The procedure that uses statistical methods (least squares regression) to fit a cost line (called a regression line) through a number of data points.
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Relevant Costs
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Those costs that differ between alternatives.
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Relevant Range
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The normal range of production that can be expected for a particular product and company.
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Residual Income
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The amount of income earned in excess of a predetermined minimum level of return on assets.
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Return on Assets (ROA)
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A measure of return to investors on all assets invested in the company. ROA = (Net income + Interest expense (net of tax)) / Average total assets.
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Return on Common Stockholders' Equity (ROCSE)
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A measure of return to common stockholders as a percentage of stockholders' equity. ROCSE = (Net income - Preferred dividends) / Average common stockholders' equity.
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Resource Utilization Decision
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A decision requiring an analysis of how best to use a resource that is available in limited supply.
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Responsibility Accounting
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An accounting system that assigns responsibility to a manager for those areas that are under the manager's control.
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Restricted Stock
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A form of management compensation in which employees receive shares of stock with restrictions such as requirements to stay with the company for a set period of time or to meet established performance measures.
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Return on Investment (ROI)
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Measures the rate of return generated by an investment center's assets. ROI = Net operating Income / Averaging operating assets.
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Revenue Center
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An organizational segment, or division, in which the manager has control over revenue but not costs or investment decisions.
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Risk
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The likelihood that an option chosen in a decision situation will yield unsatisfactory results.
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Sales Budget
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Used in planning the cash needs for manufacturing, merchandising, and service companies.
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Sales Forecast
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Combines with the sales budget to form the starting points in the preparation of production budgets for manufacturing companies, purchases budgets for merchandising companies, and labor budgets for service companies.
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Sales Price Variance
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Computed by comparing the actual sales price to the flexible budget sales price times the actual sales volume.
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Sales Volume Variance
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The difference between the actual sales volume and the budgeted sales volume times the budgeted contribution margin.
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Screening Decisions
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Decisions about whether an investment meets a predetermined company standard.
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Segment Costs
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All costs attributable to a particular segment of an organization but only those costs that are actually caused by the segment.
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Segment Margin
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The profit margin of a particular segment of an organization, typically the best measure of long-run profitability.
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Segmented Income Statements
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Reports income for each major segment of an organization in addition to the company as a whole.
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Sensitivity Analysis
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The process of changing the values of key variables to determine how sensitive decisions are to those changes.
Used to highlight decisions that may be affected by changes in expected cash flows. |
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Service Companies
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Companies that do not sell tangible product as their primary business.
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Simple Interest
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Interest on the invested amount only.
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Special-order Decisions
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Short-run pricing decisions in which management must decide what sales price is appropriate when customers place orders that are different from those placed in the regular course of business (one-time sale to a foreign customer, etc.).
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Stakeholder Analysis
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A framework to analyze ethical dilemmas that identifies stakeholders and their social, legal, ethical, and economic needs.
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Standard Cost
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A budget for a single unit of product or service.
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Standard Price
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The budgeted price of the material, labor, or overhead for each unit.
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Standard Quantity
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The budgeted amount of material, labor, or overhead for each product.
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Static Budgets
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Budgets that are set at the beginning of the period and remain constant throughout the budget period.
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Step Costs
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Costs that vary with activity in steps and may look like and be treated as either variable costs or fixed costs; step costs are technically not fixed costs but may be treated as such if they remain constant within a relevant range of production.
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Step-down or Sequential Method
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Recognizes that service departments consume resources of other service departments and allocates those costs to other service departments and then to producing departments in a sequential fashion.
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Stock Option
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The right to buy a share of stock at a set price (called the option price or strike price) at some point in the future.
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Strategic Business Unit (SBU)
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Another term for investment center.
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Strategic Planning
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Addresses long-term questions of how an organization positions and distinguishes itself from competitors.
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Strategy
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The set of policies, procedures, and approaches to business that relate to the long-term success of a business.
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Structural Activities
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Involves fundamental decisions concerning a company's size and scope of operations.
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Summary Cash Budget
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Consists of three sections:
1. Cash flows from operating activities 2. Cash flows from investing activities 3. Cash flows from financing activities. These three sections are the same as used in the cash flow statement prepared under generally accepted accounting principles (GAAP). |
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Sunk Costs
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Costs that have already been incurred.
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Supply-chain Management
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Includes a variety of activities centered on making the purchase of materials and inventory more efficient and less costly.
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Target Pricing
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A pricing method used when a price is preset by market conditions or when a company wishes to set a price in order to capture a predetermined market share or to meet other marketing goals.
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Task Analysis
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A method of setting standards that also examines the production process in detail to determine what it should cost to produce a product.
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Theory of Constraints
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A management tool for dealing with constraints; identifies and focuses on bottlenecks in the production process.
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Throughput
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The amount of product produced in a given amount of time, such as a day, week, or month.
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Time and Material Pricing
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A pricing method often used in service industries, in which labor is the primary cost incurred.
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Time Value of Money
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The concept that a dollar received today is worth more than a dollar received in the future.
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Times Interest Earned
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A measure of the company's ability to meet current interest payments to creditors. Times interest earned = (Net income + Interest expense + Income tax) / Interest expense.
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Transfer Price
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The price charged by one segment, or division, to another segment, or division, within the same organization for the transfer of goods or services.
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Trend Analysis
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Horizontal analysis of multiple years of data.
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Underapplied Overhead
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The amount of actual overhead in excess of applied overhead.
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Unit-level Costs
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Costs that are incurred each time a unit is produced.
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Usage Variance
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The difference between the actual quantity and the standard quantity times the standard price.
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Value Chain
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The set of activities that increase the value of an organization's products and services: Research and development, design, production, marketing, distribution, and customer service activities.
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Value-chain Analysis
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Involves identifying and taking advantage of internal and external linkages with the objective of strengthening a firm's strategic position.
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Value Pricing
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A pricing method that bases the price of services on the perceived or actual value of the service provided to a customer.
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Variable Costs
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Costs that stay the same per unit but change in total as production volume increases or decreases.
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Variable (direct) Costing
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A method of costing in which product costs include direct material, direct labor, and variable overhead; fixed overhead is treated as a period cost; consistent with CVP's focus on cost behavior.
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Variance Analysis
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Allows managers to see whether sales, production, and manufacturing costs are higher or lower than planned and, more important, why actual sales, production, and costs differ from budget.
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Vertical Integration
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Accomplished when a company is involved in multiple steps of the value chain.
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Volume Variance
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The difference between the flexible budget and the fixed overhead applied to a product.
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Working Capital
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The excess of current assets over current liabilities, which is a measure of an entity's liquidity.
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Work-in-process Inventory
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Inventory of unfinished product (in other words, what is left in the factory at the end of the period).
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Zero-based Budgeting
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Requires managers to build budgets from the ground up each year.
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