ch4 vocab Flashcards
activity-based costing
focuses on activities as the fundamental cost objects. The costs of those activities become building blocks for compiling the indirect costs of products, services, and customers
activity-based managment
using activity-based cost information to make decisions that increase profits while satisfying customers’ needs
appraisal costs
costs incurred to detect poor-quality goods or services
batch-level activities
activities and costs incurred for every batch, regardless of the number of units in the batch
cost distortion
overcosting some products while undercosting other products
cost of quality report
a report that lists the costs incurred by the company related to quality. The costs are categorized as prevention costs, appraised costs, internal failure costs, and external failure costs
customer response time
the time that elapses between receipt of a customer order and delivery of the product or service
departmental overhead rates
separate manufacturing overhead rates established for each departement
DOWNTIME
an acronym for the eight wastes: Defects Overproduction Waiting Not utilizing people to their full potential Transportation Inventory Movement Excess processing
external failure costs
costs incurred when the company does not detect poor-quality goods or services until after delivery is made to customers
facility-level activities
activities and costs incurred no matter how many units,batches, or products are produced in the plant
5S
a workplace organization system comprised of the following steps: Sort Set in order Shine Standardize Sustain
internal failure costs
cost incurred when the company detects and corrects poor-quality goods or services before making delivery to cusotmers
just in time
an inventory management philosophy that focuses on purchasing raw materials just in time for production and completing finished goods just in time for delivery to cutomers
kaizen
a Japanese word meaning “change for the better”
