question

Business Process

answer

A series of steps that are followed to carry out some task in a business.

question

Chief Financial Officer (CFO)

answer

member of the top management team who is responsible for providing timely and relevant data to support planning and control activities and for preparing financial statements for external users.

question

Constraint

answer

Anything that prevents an organization or individual from getting more of what it wants

question

Controller

answer

The member of top management team who is responsible for providing relevant and timely data to managers and for preparing financial statements for external users (reports to CFO)

question

Corporate governance

answer

The system by which a company is directed and controlled. If properly implemented it should provide incentives for top management to pursue objectives that are in the interests of the company and it should effectively monitor performance.

question

Corporate social responsibility

answer

A concept whereby organizations consider the needs of all stakeholders when making decisions. It extends beyond legal compliance to include voluntary actions that satisfy stakeholder expectations.

question

Decentralization

answer

The delegation of decision-making authority throughout an organization by providing managers with the authority to make decisions relating to their area of responsibility.

question

Enterprise risk management

answer

A process used by a company to help identify the risks that it faces and to develop responses to those risks that enable the company to be reasonably assured of meeting its goals.

question

Finished goods

answer

Units of product that have been completed but have not yet been sold to customers.

question

Just in time (JIT)

answer

A production and inventory control system in which materials are purchased and units are produced only as needed to meet actual customer demand.

question

Lean thinking model

answer

A five-step management approach that organizes resources around the flow of business processes that pulls units through these processes in response to customer orders.

question

Line

answer

A position in an organization that is directly related to the achievement of the organization's basic objectives.

question

Non value added activities

answer

Activities that consume resources but do not add value for which customers are willing to pay.

question

Organization chart

answer

A diagram of a company's organizational structure that depicts formal lines of reporting, communication, and responsibility between managers.

question

Raw materials

answer

Materials that are used to make a product

question

Sarbanes-Oxley Act of 2002

answer

Legislation enacted to protect the interests of stockholders who invest in publicly traded companies by improving the reliability and accuracy of the disclosures provided to them.

question

Six Sigma

answer

A method that relies on customer feedback and objective data gathering and analysis techniques to drive process improvement

question

Staff

answer

A position in an organization that is only indirectly related to the achievement of the organization's basic objectives. Such positions provide service or assistance to line positions or to other staff positions.

question

Strategy

answer

A "game plan" that enables a company to attract customers by distinguishing itself from competitors.

question

Supply chain management

answer

A management approach that coordinates business processes across companies to better serve end consumers.

question

Theory of Constraints (TOC)

answer

A management approach that emphasizes the importance of managing constraints.

question

Value Chain

answer

The major business functions that add value to a company's products and services such as research and development, product design, manufacturing, marketing, distribution, and customer service.

question

Work in process

answer

Units of product that are only partially complete and will require further work before they are ready for sale to a customer.

question

Administrative costs

answer

All executive, organizational, and clerical costs associated with the general management of an organization rather than with manufacturing or selling.

question

Budget

answer

A detailed plan for the future, usually expressed in formal quantitative terms.

question

Common cost

answer

A cost that is incurred to support a number of cost objects but that cannot be traced to them individually.

question

Control

answer

The process of instituting procedures and then obtaining feedback to ensure that all parts of the organization are functioning effectively and moving toward overall company goals.

question

Controlling

answer

Actions taken to help ensure that the plan is being followed and is appropriately modified as circumstances change.

question

Conversion cost

answer

Direct labor cost plus manufacturing overhead cost

question

Cost behavior

answer

The way in which a cost reacts to change in the level of activity.

question

Cost object

answer

Anything for which cost data are desired. Examples include products, customers, jobs, and parts of the organization such as departments or divisions.

question

Cost of goods manufactured

answer

The manufacting costs associated with the goods that were finished during the period.

question

Differential cost

answer

A difference in cost between two alternatives (also think of Incremental cost)

question

Differential revenue

answer

The difference in revenue between two alternatives

question

Direct cost

answer

A cost that can be easily and conveniently traced to a specified cost object.

question

Directing and motivating

answer

Mobilizing people to carry out plans and run routine operations

question

Direct labor

answer

Factory labor costs that can be easily traced to individual units of product (aka touch labor)

question

Direct materials

answer

Materials that become an integral part of a finished product and whose cost can be conveniently traced to it

question

Feedback

answer

Accounting and other reports that help managers monitor performance and focus on problems and/or opportunities that might otherwise go unnoticed.

question

Financial accounting

answer

The phase of accounting concerned with providing information to stockholders, creditors, and others outside the organization.

question

Finished goods

answer

Units of product that have been completed but not yet sold to customers.

question

Fixed cost

answer

A cost that remains constant, in total, regardless of changes in the level of activity within the relevant range. (If ____ is expressed on a per unit basis, it varies inversely with the level of activity)

question

Incremental cost

answer

An increase in cost between two alternatives (also consider differential cost)

question

Indirect cost

answer

A cost that cannot be easily and conveniently traced to a specified cost object.

question

Indirect labor

answer

The labor cost of janitors, supervisors, materials handlers, and other factory workers that cannot be conveniently traced to particular products.

question

Indirect materials

answer

Small items of materials such as glue and nails that may be an integral part of a finished product, but whose costs cannot be easily or conveniently traced to it.

question

Inventoriable costs

answer

Synonym for product costs.

question

Managerial accounting

answer

The phase of accounting concerned with providing information to managers for use within the organization

question

Manufacturing overhead

answer

All manufacturing costs except direct materials and direct labor

question

Opportunity cost

answer

the potential benefit that is given up when one alternative is selected over another.

question

Performance report

answer

A detailed report comparing budgeted data to actual data

question

Period costs

answer

Costs that are taken directly to the income statement as expenses in the period in which they are incurred or accrued.

question

Planning

answer

Selecting a course of action and specifying how the action will be implemented.

question

Planning and control cycle

answer

The flow of management activities through planning, directing and motivating, and controlling, and then back to planning again.

question

Prime cost

answer

Direct materials cost plust direct labor cost

question

Product costs

answer

All costs that are involved in acquiring or making a product. In the case of manufactured goods, these costs consist of direct materials, direct labor, and manufacturing overhead (also consider inventoriable costs)

question

Relevant range

answer

The range of activity within which assumptions about variable and fixed cost behavior are valid.

question

Schedule of cost of goods manufactured

answer

A schedule showing the direct materials, direct labor, and manufacturing overhead costs incurred during a period and the portion of those costs that are assigned to Work in Process and Finished Goods.

question

Segment

answer

Any part of an organization that can be evaluated independently of other parts and about which the manager seeks financial data. Examples include a product line, a sales territory, a division, or a department.

question

Selling costs

answer

All costs that are incurred to secure customer orders and get the finished product or service into the hands of the customer.

question

Sunk cost

answer

A cost that has already been incurred and that cannot be changed by any decision made now or in the future.

question

Variable cost

answer

A cost that varies, in total, in direct proportion to changes in the level of activity. (it is constant per unit)

question

Absorption costing

answer

A costing method that includes all manufacturing costs--direct materials, direct labor, and both variable and fixed manufacturing overhead--in the cost of a product.

question

Allocation base

answer

A measure of activity such as direct labor-hours or machine-hours that is used to assign costs to cost objects.

question

Bill of materials

answer

A document that shows the quantity of each type of direct material required to make a product.

question

Cost driver

answer

A factor, such as machine-hours, beds occupied, computer time, or flight-hours, that causes overhead costs.

question

Job cost sheet

answer

A form prepared for a job that records the materials, labor, and manufacturing overhead costs charged to that job.

question

Job-order costing

answer

A costing system used in situations where many different products, jobs, or services are produced each period.

question

Materials requisition form

answer

A document that specifies the type and quantity of materials to be drawn from the storeroom and that identifies the job that will be charged for the cost of those materials.

question

Multiple predetermined overhead rates

answer

A costing system with multiple overhead cost pools and a different predetermined overhead rate for each cost pool, rather than a single predetermined overhead rate for the entire company. Each production department may be treated as a separate overhead cost pool.

question

Normal cost system

answer

A costing system in which overhead costs are applied to a job by multiplying a predetermined overhead rate by the actual amount of the allocation base incurred by the job.

question

Overapplied overhead

answer

A credit balance in the Manufacturing Overhead account that occurs when the amount of overhead cost applied to Work in Process exceeds the amount of overhead cost actually incurred during a period.

question

Overhead application

answer

The process of charging manufacturing overhead cost to job cost sheets and to the Work in Process account.

question

Plantwide overhead rate

answer

A single predetermined overhead rate that is used throughout a plant.

question

Predetermined overhead rate

answer

A rate used to charge manufacturing overhead cost to jobs that is established in advance for each period. It is computed by dividing the estimated total manufacturing overhead cost for the period by the estimated total amount of the allocation base for the period.

question

Process costing

answer

A costing system used in situations where a single, homogenous product (such as cement or flour) is produced for long periods of time.

question

Time ticket

answer

A document that is used to record the amount of time an employee spends on various activities

question

Underapplied overhead

answer

A debit balance in the Manufacturing Overhead account that occurs when the amount of overhead cost actually incurred exceeds the amount of overhead cost applied to Work in Process during a period.

question

Customer Value Propositions

answer

the reason why customers choose a certain company over others: "COP" 1). Customer intimacy 2). Operational excellence 3). Product Leadership

question

DMAIC

answer

common framework used to guide Six Sigma process improvement efforts; Define, Measure, Analyze, Improve & Control

question

ethics

answer

if _____ were not adhered to, everyone in the economy would suffer.

question

Principles of Code of Conduct for Managerial Accountants

answer

"F-HOR" Honesty, Fairness, Objectivity, & Responsibility

question

Standards of Code of Conduct for Managerial Accountants

answer

"C-CCI" Competence, Confidentiality, Credibility, & Integrity

question

International Federation of Accountants

answer

IFAC stands for...

question

Certified Management Accountant

answer

CMA stands for...

question

4 steps to become CMA

answer

"C-R2-P" 1). Register for CMA exam 2). Pass all 4 parts within 3 years 3). have 2 years professional accounting experience 4). Compy with statement of ethical professional practice

question

nonmanufacturing costs

answer

(aka period/selling/admin costs) Include: 1). Selling costs 2). Administration costs

question

Selling Costs

answer

(sales commissions, advertising, depreciation of delivery equipment, finished goods warehouses) these are examples of what type of cost?

question

Administration costs

answer

(executive compensation, exec. travel costs, secretarial salaries, depreciation of office buildings and equipment) these are examples of what type of cost?

question

manufacturing overhead

answer

(indirect materials, indirect labor, factory utilities, & depreciation of factory buildings and equipment) these are examples of what type of cost?

question

Schedule of Cost of Goods Manufactured

answer

Direct Materials Add: beg. raw materials inventory Deduct: ending raw materials inventory Direct Labor Manufacturing Overhead Total Manufacturing Cost (sum of above 3 categories) Add: Beg. work in process inventory Deduct: end. work in process inventory Cost of goods manufactured:

question

costs of goods sold in merchandising company

answer

= beg. merchandise inventory + purchases - end merchandise inventory

question

cost of goods sold in manufacturing company

answer

= beg. finished goods inventory + cost of goods manufactured - ending finished goods inventory

question

variable

answer

__________ cost per UNIT remains constant

question

fixed

answer

_________ cost per UNIT goes down as activity level goes up & increases as activity level goes down

question

variable

answer

in total, _________ cost increases/decreases in proportion to activity level

question

fixed

answer

in total, _________ cost is NOT affected by activity level changes (within the relelvant range)

question

unit product cost

answer

calculation to find ________ : = (total manufacturing cost) / (total units produced)

question

total cost

answer

equation to find _________: = direct materials + direct labor + overhead

question

predetermined overhead rate

answer

equation to find _________ : = (estimated total manufacturing overhead cost) / (estimated total amount of the allocation base)

question

overhead applied to a particular job

answer

equation to find _________ : = (predetermined overhead rate) X (amount of the allocation base incurred by the job)

Managerial Accounting Terms Test 1 – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards