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41 Cards in this Set
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Is a total quality management tool for cost and performance measurement of activities, resources, and cost objects (i. e., products and services) |
Activity-based costing |
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Also known as the “horizontal” or cross-functional cost view |
Activity-based costing |
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- The overhead cost attributed to a distinct type of activity |
Activity Cost Pool |
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- Any factors or activities that have a direct cause-effect relationship with the resources consumed. |
Cost Drivers |
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used to overcome some of the failures of standard costing for improving managerial decision making. |
Activity-based costing |
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Benefits of ABC In Service Industry |
Identification of the most profitable customers More accurate product and service pricing Increase product profitability Well-organized process cost |
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An activity that increases the worth of a product or service |
Value added activities |
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An activity that adds cost to, or increases the time spent on, a product/service without increasing its market value |
Non value added activities |
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Uses activity-based costing to determine the activities, costs, and profit associated with serving particular customers |
Customer Profitability Analysis |
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the most important cost |
professional labor |
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Examples of Service-Oriented Firms that Successfully Adopted and Implemented ABC |
A Large Regional Bank- allocate resources Global Insurance Company- tax purposes Multifoods Distribution Group- effective charges New England's Largest Electricity Utility Company- customer requirement |
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Steps Used by The Firms to Develop an ABC System |
Form a cross functional team Identify cost objects Identify activities Identify cost drivers Attribute activity cost to cost object Use the information |
FIIIAU |
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Allocates overhead using a single predetermined rate. |
Traditional Costing |
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Direct labor cost is assumed to be the relevant activity base. |
Job order costing |
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An overhead cost allocation system that allocates overhead to multiple activity cost pools |
Activity-based costing |
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is a costing method that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each |
ABC |
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Classification of Activities |
Unit level Batch level Customer level Organization sustaining Product level |
UBCOP |
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Characteristics of Successful ABC Implementation |
Cross functional involvement Link evaluations and rewards Strong top management support |
CLS |
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is a management that seeks to integrate all organizational functions such as marketing, finance, engineering, customer services, and so forth to focus on meeting customer needs and organizational objectives |
TQM(Kuram Hasmi) |
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BASIC CONCEPTS OF TQM |
Quality Quality policy Quality management Quality assurance Quality control Conformity Quality circle |
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The totality of features and characteristics of product or service that bears on its ability to satisfy stated or implied needs of a customer |
Quality |
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The overall quality intentions and directions of an organization as regards quality formally expressed by top management |
Quality policy |
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The aspect of the overall management function that determines and implements quality policy |
Quality management |
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planned and systematic actions necessary to provide adequate confidence that a product or service will satisfy requirements of a customer |
Quality assurance |
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operational techniques and activities that are used to fulfill requirements for quality |
Quality control |
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An affirmative indication or judgment that the supplier/manufacturer of a product or service has met the requirements of the relevant specifications, contact or regulations and also the state of meeting requirements, is the real test of quality. |
Conformity |
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is a process that stimulates everyone to achieve greater satisfaction in the work environment |
Quality circle |
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8 PRINCIPLES OF TQM |
Customer focus Leadership Employee involvement Process approach Strategic and statistical approach Continual Improvement Factual approach to design making Mutually beneficial supplier partnership |
CLEPSCFM |
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Limitation of TQM |
Cost in time money Fear of change |
CF |
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Advantages of Incentive system |
Higher sales Teamwork Increased encouragement Reduced turnover Improved morale |
HTIRI |
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Disadvantages of Incentive System |
Poor customer service Built in limitations Resentment Manipulation |
PBRM |
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Operations Competitive Dimensions |
Cost Product quality and reliability Delivery speed Delivery reliability Coping with changes in demand Flexibility and new product introduction speed |
CPDDCF |
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Requirements to create a Continuous Improvement Culture |
Will Skill Authority Guidance |
WSAG |
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wide variety of products to its customers. |
Flexibility |
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is a group of workers performing the same or similar work, who meet regularly to identify, analyze and solve work-related problems. |
quality circle |
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is a Japanese organizational theorist and management consultant, known for his work on quality management, specifically on Kaizen. |
Masaaki Imai |
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2 Activities of Kaizen |
Maintenance Improvement |
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involves activities directed at maintaining current technological, managerial and operating standards. |
Maintenance |
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aims at revising the current standards |
Improvement |
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3 Basic principles of Kaizen |
Workplace effectiveness Elimination of waste, strain and discrepancy Standardized |
WES |
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5S tool |
Seiri(sort) Seiton(set in order) Seiso(shine) Seiketsu(standardized) Shitsuke(sustain) |
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