Upgrade to remove ads
Accounting - Exam 1 Things to Remember
Terms in this set (70)
what does management accounting allow management and employees to do?
make decisions, allocate resources, monitor/evaluate/reward performance
characteristics of financial accounting
external, retrospective, regulated, financial, highly detailed
characteristics of managerial accounting
internal, retro/prospective, no regulations, financial and non-financial, not detailed
choices a company elects to make (or not to make) that utilize the company's resources and environment to achieves its goals
components of strategy
competitive advantage, scope
what do i do differently/uniquely/better compared to competition?
where to i intend to compete most aggressively? - target customers, technologies used, geographic locations served, product line breadth
what is used when making decisions?
plan, do, check, act cycle
identify objectives and choose course of action to achieve desired objectives
implement the chosen course of action
monitor and measure results of the implemented course of action, and evaluate the results by comparing them with the results expected when the plan was first developed
maintain the current direction if the results are acceptable, otherwise return to the plan stage to develop and implement an alternative course of action
managerial accounting implemented in plan stage
SWOT analysis, strategies to achieve organization's objectives
managerial accounting implemented in do stage
financial (cost/profit) and non-financial (customer satisfaction, complaints, efficiency)
managerial accounting implemented in check stage
measuring, evaluating, and reporting performance
managerial accounting implemented in act stage
actions to reduce costs, improve process quality, enhance customer relationships
a method that managers use to break down their strategies for employees to better understand company objectives
concise statement of how the organization expects to compete and deliver value to customers; INTERNAL
concise statement that defines an organization's mid to long-term (3-10 year) goals and states how the organization wants to be perceived by the world; EXTERNAL
what doesn't the strategy map include that the balance scorecard includes?
targets and measures, strategy map is only a component of the balance scorecard
what two perspectives deal with WHAT - what do i want to achieve?
financial and customer
what two perspectives deal with HOW - how do i want to achieve my goal?
process and learning and growth
WHAT success is, as measured by the shareholders
WHAT can we do to create and deliver value to customers?
HOW can we achieve our objectives in financial and customer perspectives, and what processes must we excel at?
learning and growth perspective
HOW do we align and enhance intangible assets to improve processes?
objectives for the financial perspective:
achieve productivity, generate revenue growth
objectives for the customer perspective
low-total cost, product leadership, customer solutions
low cost supplier with consistent high quality, speedy and easy purchase with appropriate selection of products
low-total cost (EX: wal-mart)
offers high-performance products; typically the first to the market
product leadership (EX: ferrari, gucci, versace)
1-stop shop, multiple products/services, personalized relationships, customized solutions, post-sale services
customer solutions (EX: apple, costco)
groups of processes in the process perspective
operations management, customer management, innovation in R&D, regulatory and social
produces products/services and delivers them to customers
selects, expands, and deepens relationships with targeted customers
develops new products, processes, and services enabling the company to penetrate new markets and customer segments
innovation in R&D
relationship with the community, community investment, health and safety for employees, good to the environment
regulatory and social
focus groups within the learning and growth perspective
HR, organization, IT
deals with skills training and knowledge of employees
deals with the culture of the company, goal alignment, and knowledge sharing
deals with systems, databases, and networks
what do non-profit and government organizations deal with?
their impact on the community
what two types of customers do non-profit and government organizations have?
providers of resources, and those getting the service
negatives of the balance scorecard
too few measures, too many measures, missing linkages, forgetting to start with strategy, treated as a 1 time event or a consulting project, senior management not committed
changes proportionally with the volume or level of activity
examples of variable costs
gas for airplanes, hourly wages, fabric or thread used to make an item
costs that do NOT vary in the short run
examples of fixed costs
gas for delivery truck, salaries, insurance, depreciation, rent
unit fixed cost
average fixed costs decrease as activity increases
production costs that are inventoriable
examples of manufacturing costs
direct material, direct labor, MOH
period costs that are not inventoriable (not allocated to the cost of the product)
examples of non-manufacturing costs
distribution, selling, marketing, after-sale maintenance, R&D, G&A
what do price and variable cost per unit do?
remain the same
what remains the same over all levels of production?
cost of the next unit of production, the variable cost of producing one more unit
a cost from a previous commitment that cannot be recovered, and is irrelevant for decision making
taking sunk costs into account and trying to recover it by throwing more money into something that might be useless
a cost that will change as a result of a decision (all the food, parking, drinks that you will have to buy from deciding to go to the concert)
maximum value forgone from a best alternative when a course of action is chosen
cost that can be avoided by undertaking a course of action
anything for which cost is computed (products, activities)
anything that is uniquely and unequivocally attributable to a single cost object
cannot be easily traced to a cost object, must be allocated to objects
cost depends on the amount of resource used (newsprint for newspaper, plastic used to make a laundry basket)
consumable resource, direct and variable cost
cost depends on the amount of resource capacity that is required (salary paid to a lawyer, depreciation of factory equipment)
capacity-related resource, indirect and fixed cost
process capacity after accounting for expected unavoidable changes in available production time
risks of using planned level of the cost driver
capacity-related costs are fixed, planned level of production decreases and cost driver increases, death spiral
what has the highest potential for cost system distortions?
non-uniform custom-made products, made-to-order, sales first and production second
uniform, identical products, continuous flow, production first and sales second
YOU MIGHT ALSO LIKE...
Accounting 211 Exam 1
AIS 211 exam 1
icost exam 2
Managerial Cost Accounting Test 1
OTHER SETS BY THIS CREATOR
PRACTICE EXAM #1