Chapter 1 Flashcards
Value Chain
Set of activities that transforms raw resources into the goods and services that end users purchase and consume
Value-added activities; Non-value-added activities
Activities that customers perceive as adding utility to the goods or services they purchase; activities that do not add value to the good/service
Supply chain
Set of firms and individuals that SELL goods and services to the firm
Distribution chain
Set of firms and individuals that BUYS and DISTRIBUTES goods and services from the firm
Cost accounting
Field of accounting that measures, records, and reports information about costs; designed for managers
Financial Accounting
Field that reports financial position and income according to accounting rules
GAAP, IFRS
GAAP: Rules, standards, and conventions that guide the preparation of financial accounting statements for firms registered in the US
IFRS: for other countries
Cost-benefit analysis
Process of comparing benefits (often measured in savings or increased profits) with costs associated with a proposed change within an organization
Differential costs/revenues
Costs: With two or more alternatives, costs that differ among or between alternatives
Revenues: change in response to a particular course of action
Budget
Financial plan of the revenues and resources needed to carry out activities and meet financial goals
Activity-based costing
First assigns costs to activities and then to products based on the products’ consumption of activities
Just-in-time method
Companies produce or purchase units just in time for use, keeping inventories at a minimum
Lean accounting
Provides measures that minimize wasteful or unnecessary transaction processes.
Customer relationship management
Allows firms to target profitable customers by assessing customer revenues and costs
Outsourcing
Having a firm’s activities performed by another firm
