BEC 2 HW Flashcards
mnemonic: SEC consider what factor when selecting puc co for review
(C PERV) C=large market Cap; P=diff P/e ratio; E=affect Economy; R=issued mat Restatemnt; V=Volatility in stock
Information Quality
(FAIR) F=Fair; A=Accurate,Accessible,Appropriate, C=Current; T=Timely
CRIME (COSO Framework)
Control Environment; mgmt Risk Assess; Info & comm sys; Monitoring; Exist control activities
mnemonic: Components of ERM
(CRRRIMES) C=Control/internal enviro; R=assess Risk; R=id Risk; R=Risk response; I=Info & comm sys; M=Monitoring; E=Effective control activities; S=Setting objectives (orcS)
Control/Internal Environment Factors
(EBOCA HR) E=Ethical val & integrity; B=Board oversight; O=Org structure; C=Commitment to Competence; A=Accountability; HR=hiring, risk mgmt/appetite
objectives of cost accounting
(PIE) P=Product costing; I=Income; E=Efficiency
OPERATING budgets contain what factors? 4
(PPSS)Personnel, Production, Sales, Selling/Admin
3 major section of CASH BUDGET
- Cash Available; 2. Cash Disbursement; 3. Financing=line of credit
variable needed for flex budgets
- rev per unit; 2. vc per unit; 3. fc per unit
Order of budget preparation (5)
(Some People Make Cash Payments) 1. Sales; 2. Production; 3. Materials/Labo/OH purchased; 4. Cash; 5. Pro Forma F/s
3 purposes of standard costing systems
- cost control; 2. variance analysis; 3. learn from & improve processes
4 measures of SBU to which mgmt is held accountable
(CRPI=mgmt is creepy) C=Cost; R=Revenue; P=Profit; I=Investment
FEEDBACK w/in financial scorecards must be (AT US)
Accurate, Timely, Understandable, Specific
Factors w/in the BALANCED SCORECARD
(FICA) F=Financial; I=Internal bus processes; C=Customer satisfaction; A=Advancement of innovation & hr develpmnt
3 examples of off b/s transactions
- op lease; 2. lawsuits; 3. related party trans
the difference b/n VARIABLE costing & FULL ABSORBTION costing lies in the treatment of ____
FIXED MANU COSTS
in FULL ABSORBTION COSTING, fixed manu are treated as ____
PRODUCT costs
in VARIABLE COSTING, fixed manu are treated as ____
PERIOD costs
in FULL ABSORBTION COSTING, fixed Manu OH =
full MOH/units produced=n; n x units sold = full absorbtion manu OH
which will give you less Manu OH, thus higher NI? (full or absorbtion)
FULL ABSORBTION
what ‘costs’ should be considered when considering discountinuing a product line?
RELEVANT COST = those costs that will change under different alternatives
breakeven formula
FC + VC(n) = SP(n)
Contribution Margin =
CM = Sales - VC
FC / CM% =
Breakeven
CM%
CM/Sales
Margin of Safety =
Actual Sales - BE Sales
ROE =
NI / Shareholder’s Equty
multiple regression differs from simple regression in that it
has more INDEPENDENT variables
define: relevant RANGE
the range over which cost relationships are valid
____costing encourages LARGER inventories
ABSORBTION
SPE
Special Purpose Entity
External Benchmarks aka
PRODUCTIVITY MEASURES
OVERAPPLIED = (dr?cr?)
CREDIT
is debr part of FC when computing BE?
YES so is variable selling costs
which forecasting method relies MOSTLY on judgement?
DELPHI
under the ____ forecasting method, multiple geo dispersed teams work together (highly judgemental input used)
DELPHI
the best TRANSFER (interco) pricing model is based on _____ price
MARKET price
which costing method may be used for external reporting? (variable or absorbtion)
ABSORBTION is appropriate for external reporting
a ____ is a series of budgets based on different activity levels within the relevant range
FLEXIBLE BUDGET
Flex Budgets are appropriate for
anything with VARIABLE costs
the ____ is a performance measurement tool used to evaluate multiple DIMENSIONS (aka “critical success factors”) of business outcomes
BALANCED SCORECARD
Critical Success Factors are classified as 4 (hint Financial & non financial)
Human resource(aka Learning & Growth & Innovation), Business process, Customer satisfaction, Financial performance
a ____ is responsible for revenue and costs
PROFIT center
Strategic Business Units are classified into 4 types
Cost, Revenue, Profit, Investment
Strategic Business Units are established in a ____ environment
DECENTRALIZED
COGM =
DM+DL+OH app + Bwip - Ewip
COGS =
COGM + Bfg - Efg
Pro Forma budget preparation order 3
- b/s 2. i/s 3. scf
revenue variance aka
sales price variance (is due to a change in unit SELLING PRICE)
standard costing systems are used in conjunction with ____
FLEXIBLE BUDGET
performance mgmt measure/tracking that integrates fin & nonfin performance measures
BALANCED SCORECARD
Sensitivity analysis uses
trial and error testing
