BEC 2 Flashcards
What does Variable Costs include?
Direct labor Direct Material Variable Manufacturing Overhead Shipping and Packaging Variable Selling Expenses
What is Absorption approach for fixed factory overhead?
All fixed factory overhead is treated as product cost and is included in inventory values.
When is net income reported more reliable?
Under absorption method is less reliable than under variable method because fixed costs become cost of product which effects inventory and net income.
What is Sensitivity Analysis?
The process of experimenting with different parameters and assumptions regarding a model and to view the possible consequences of a decision.
What is forecasting Analysis?
Forecasting involves predicting future values of dependent variable.
What is simple regression?
Simple regression is a linear function of one or more independent variables.
What is the Coefficient of Correlation?
Strength between two variables. its between -1 to +1
What is Coefficient of Determination?
Proportion of the total variation in the dependent variable explained by the independent variable.
What is high- Low Method?
It is a simple technique that is used to estimate the fixed and variable portions of cost usually production costs.
What is Flexible budget?
Total Cost = Fixed Cost +(variable cost per unit x number of units)
What are participative standards?
Set by managers and individuals
What are master budgets?
Confined to one year at a single level of activity.
What Material Variances?
Price variance= AQ( AP- SP)
Quantity Variance = SP x (AQ-SQ)
What is Critical success factors?
Financial Solvency
Customer satisfaction
Internal business processes
Human resource innovation
