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1. Semester > BWL - Management Accounting > Flashcards

BWL - Management Accounting Flashcards

1
Q

cost volume profit relationship

A

how many units do we need to sell to avoid making losses?
-> total cost and revenue change with the activity level

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2
Q

cost

A

monetary measure of resources foregone to achieve a specific objective

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3
Q

cost object

A

any activity for which a separate measurement of cost is required
-> cost of something
-> cost of making a product, serving a costumer

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4
Q

product cost

A

-> attached to the products and included in inventory valuation
-> can be inventoried

manufacturing firm -> product cost = manufacturing cost

merchandise firm -> product cost = cost of goods purchased

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5
Q

Cost collection system

A
  1. Accumulate cost by classifying into categories
    -> cost of labour, material
    -> fixed and variable cost
  2. assign costs to cost objects
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6
Q

direct cost

A

-> can be specifically identified with a certain cost object
-> can be traced to this object
-> is traceable cost

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7
Q

indirect costs

A

-> cannot be identified specifically with a certain cost object
-> cannot be traced to this cost object
-> distinction depends on cost object
-> indirect costs are assigned to cost objects

-> overhead cost need to be allocated

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8
Q

profit

A

revenue - total cost

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9
Q

period cost

A

-> not attached to the products and not included in inventory valuation

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10
Q

Period and Product costs

A

-> unsold product cost is recorded as an asset (inventory)
-> becomes expense when the product is sold

-> sold product cost is recorded in an expense in the current accounting period

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11
Q

variable cost

A

vary in direct proportion with activity

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12
Q

fixed cost

A

remain constant over wide ranged of activity

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13
Q

relevant cost

A

change because of a decision

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14
Q

irrelevant cost

A

do not change because of a decision
-> relevance is relative to the decision

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15
Q

avoidable costs

A

can be saved by not adopting a given alternative
-> is relevant costs

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16
Q

unavoidable costs

A

cannot be saved by not adopting a given alternative
-> is irrelevant cost

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17
Q

sunk costs

A

cost of resources already acquired and are unaffected by the choice between various alternatives
-> irrelevant for decision making

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18
Q

opportunity cost

A

measures the opportunity that is lost when the choice of one course of action requires that an alternative course of action be given up
-> relevant for decision making

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19
Q

incremental costs

A

difference of costs between alternatives

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20
Q

marginal cost

A

additional costs of one additional unit

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21
Q

Assignment of direct/indirect cost

A

-> total costs are measured against a cost object
-> direct costs can be traced to the cost object
-> indirect costs cannot be traced; need to be assigned to the cost object through traditional costing system or ABC

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22
Q

Overhead rates

A

-> assign total overhead using a single overhead rate for the entire organisation
-> one fits all

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23
Q

plant-wide overhead rate

A

-> only justified if all products consume departmental overheads in approximately the same proportions
-> e.g. all products use a proportional amount of machine hours in every department

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24
Q

cost center overhead rate

A

-> required if products do not consume departmental overhead in the same proportion
-> product X is only produced in department X
-> for each cost center a specific overhead rate is used to allocate the overhead

25
actual overhead rate
inappropriate because: -> product costs can only be calculated after the end of the period -> product costs will be available with a considerable delay -> if period are months overhead rates are subject to seasonal fluctuations
26
budgeted overhead rates
based on long-term estimates: -> estimated normal overhead costs of the year -> estimated normal activity level -> often budget is unequal to actual activity at the end of the year -> overhead is over- or underapplied and closed against COGS at year end
27
job costing system
-> various different products are produced in discrete batches -> batches are unique, but all products within are identical -> costs need to be allocated to job/batches -> each unit consumes different quantities of resources e.g. plates produced in a pottery, airplanes at Airbus
28
process costing
-> direct costs and factory overhead are not assigned to individual units but processes -> each unit is identical -> average unit costs are computed
29
variable costing
-> direct costing or marginal costing -> traces all variable cost to products -> all fixed overhead = period cost
30
FIFO vs. weighted average method
FIFO -> beginning WIP is processed first before new units are started -> beginning WIP is likely to be finished at the end of the year weighted average method -> beginning WIP cannot be identified separately -> depending on this assumption, different cost per unit may result
31
Wann ist weighted average = FIFO?
wenn man in zwei Jahren hintereinander gleich effizient war wenn der Preis nicht flakutiert wenn es kein beginning WIP gibt
32
Absorption costing
-> full costing -> trace all manufacturing costs to products -> all non manufacturing overhead is period cost
33
Impact on profit
profits are the same if production = sales if production > sales -> profit absorption costing > profit variable costing -> Inventory wird wegen der fixen Kosten höher bewertet if sales > production -> profit absorption costing < profit variable costing -> under variable costing profit follows sales more closely
34
35
contribution
revenue - variable cost
36
break even point
total fixed cost/contribution per unit -> activity level where profit = 0
37
target profit
fixed cost + target profit/contribution per unit -> activity level to obtain a profit of x
38
profit at a particular activity level
total contribution - fixed cost per unit -> profit at the activity level of x
39
determine selling price
(profit + fixed cost)/units + variable cost per unit -> selling price to determine a profit of x on sales of x
40
additional sales to cover additional fixed cost
additional fixed cost/contribution per unit -> additional sales needed to cover additional fixed cost
41
percentage margin of safety
(expected sales - break even sales)/expected sales -> how much can the sales drop from x units until losses occur?
42
relevant cost
-> future cash flows that will differ between various alternatives -> only incremental/marginal cost are relevant -> cost that will be affected by the decision
43
Relevant cost are required for:
1. Special pricing decisions 2. Product mix decisions when capacity constraints exist 3. Decisions on replacement of equipment 4. outsourcing decisions 5. discontinuation decisions
44
Relevance of opportunity cost in decision making
-> OC represent the lost contribution of profits arising from the best use of alternative forgone -> these costs are affected by the decision -> therefore should be considered as relevant costs
45
Special pricing decision
-> typically only one time orders or orders below market price -> only differential cost is relevant -> revenue for the one alternative is opportunity cost for the other
46
Product mix decisions
-> limiting factor exists -> focus on products that provide the largest contribution per limiting factor
47
Replacement of equipment
-> past cost is irrelevant -> depreciation
48
discontinuation decision
-> periodic analysis of profits
49
Activity based costing
-> measures the cost of using resources, not of supplying them cost of supplied resources = cost of used resources + cost of idle capacity -> unused capacity arises with commited resources -> cash flows consequences only arise if supply of (idle) capacity reduces -> ABC is more complex than traditional costing -> results dont really differ from traditional costing if the percentage of indirect cost is low
50
Motivation (Activity based costing)
-> many decisions considerably affect the demand for support functions (indirect cost) -> indirect cost cant be traced to cost objects -> indirect cost are larger than direct cost for many firms -> allocation of indirect cost is inappropriate using traditional cost accounting methods
51
Types of costing systems
1. Direct costing system -> indirect cost arent assigned to cost objects -> no profit, but a contribution to cover total fixed cost is reported per cost object 2. Traditional costing system -> use unsophisticated methods to allocate indirect cost to cost objects -> e.g. per machine hour, labor hour 3. Activity based costing system -> use sophisticated methods to allocate the indirect costs to cost objects -> based on activities that require certain support functions
52
Designing ABC Systems
First stage allocations -> resource cost drivers -> activities/support units Second stage allocations -> activity cost drivers -> large number of cost drivers 1. Identify major activities -> choose reasonable aggregation level for activities -> a single cost driver should determine the cost of activity -> many firms use 20 to 30 main activities 2. Assign costs to activity cost centers -> assign direct and indirect cost to each activity -> no arbitrary allocation should be used but cause and effect allocations 3. Determine the cost driver for each major activity -> drivers provide a good explanation of cost for the respective activity -> driver is equally measurable transaction drivers = number of times an activity is performed duration drivers = amount of time an activity is performed 4. Assign the cost of activities to products -> measure cost driver for the respective cost object
53
Wie kann man Kostenstellen beeinflussen?
durch budgets -> Managers bekommen Budgets zugeordnet
54
Funktionen eines Budgets?
planning coordination communication motivation control performance evaluation
55
variable Gemeinkosten
-> ja, gibt es -> z.B. Stromkosten für eine Maschine, da sich da die Produktionsmenge und damit Strommenge ändern kann (Stromkosten für ein Gebäude wären fixe Gemeinkosten)
56
fixe Einzelkosten
-> z.B. Anschaffungskosten für eine Maschine, die genau für ein spezifischen Zweck angeschafft wurde
57
Einfluss non-financial Informationen?
->
58
unechte Gemeinkosten
-> wenn von einer vorhandenen Möglichkeiten der Einzelkostenerfassung kein Gebrauch gemacht wird
59

1. Semester (9 decks)

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