ABC... easy as 1, 2, 3 Flashcards
Shared services
where one part of an org provides an essential business process where previously it was provided by multiple parts of that same org
What is a significant risk with off-shore operations?
cultural/ language issues
difficulty protecting intellectual property rights
What is a process that typically results in radical change?
Business process reengineering.
What are cost drivers? (allocation bases)
independent variables that help to explain the behavior of costs and are useful in providing cost allocations that more closely reflect the causal factors affecting cost behavior.
What are the main objectives of process mgmt?
Increase the understanding of business processes
Promote the elimination of waste
What is the difference between variable and absorption costing?
the treatment of fixed manu costs
Variable costing assigns ____ manu costs to inventory.
Variable. Treated as product costs:
Direct materials
Direct labor
Only VARIABLE MOH
Absorption costing includes ___ in inventory:
DM
DL
Variable AND fixed MOH
How should Fixed MOH and variable selling costs be classified under Direct (variable) costing and absorption costing
As period costs. Variable selling costs are period costs under both methods. Direct costing also treats F manu costs as period costs.
Under Direct costing how are variable manu. costs treated?
as product costs.
When do absorption costing and direct costing produce the same net income?
when the number of units sold = number of units produced
Calc the difference in income between absorption costing and direct costing
= change in inventory x FOH per unit
What is an advantage of using variable costing
it makes cost-volume relationships more apparent
When is job order costing used?
it is used to accumulate costs related to the production of often large, relatively expensive heterogeneous (custom ordered) items
