Chapter 17 Flashcards
activity-based costing
(ACB) A costing system for situations where overhead is high and/or a variety of products are produced; costs are traced to activities and then ativities are allocated to production
B2B
(Business to Blusiness) A system that enables data interchange between companies; sometimes sufficiently robust to permit automatic inventory replenishment, etc.
budget
A planning tool that outlines the financial plans for an organization; there are various types of budgets – operating, capital, and financial.
CFM
Certified Financial Manager; a professional designation of competency in the field of financial management that is issued by the Institute of Management Accountants.
CMA
Certified Management Accountant; a professional designation of competency in the field of management accounting that is issued by the Institute of Management Accountants.
controller
The primary person responsible for the cost and managerial accounting functions.
conversion cost
Cost components needed to change raw materials to finished goods, specifically direct labor and manufacturing overhead.
cost accounting
The process by which an organization’s cost is collected, assigned, and interpreted.
cost of goods manufactured
The amount of cost attributable to goods reaching the end of production; beginning work in process (wip) + (direct materials, direct labor, manufacturing overhead) - ending wip.
direct labor
Gross wages paid to those who physically and directly work on the goods being produced.
direct material
The costs of all materials that are an integral part of a finished product and that have a physical presence that is readily traced to that finished product.
ERP
(Enterprise Resource Package) Comprehensive database software that tracks an almost endless array of business and accounting data.
finished goods
Finished goods represent the cost of completed products awaiting sale to a customer.
IMA
Institute of Management Accountants; a professional association for management accountants that sponsors the CMA and CFM designations.
inventoriable cost
product costs that attach to inventory.
job costing method
A costing approach whereby actual labor and material is tracked for each job or product.
M2M
(Machine to Machine) enables connected devises to communicate with each other.
manufacturing overhead
All costs of manufacturing other that direct materials and direct labor (also called factory overhead)
period cost
A cost not attributable to the acquisition or manufacture of inventory; expensed as incurred
prime cost
Product costs that are direct in nature; direct materials and direct labor.
process costing methods
A product costing method particularly well suited to situations where production occurs in a continuous process; costs are pooled and assigned to aggregate output.
product cost
Costs that attach to a product; the summation of direct materials, direct labor, and factory overhead.
raw materials
the components that will be used in manufacturing units that are not yet started – also know as direct materials.
RFID
(radio frequency identification) Micro processes embedded in inventory that emit radio frequency signals that enable a computer to automatically track inventory.
scorecards (balanced)
A system for evaluating elements that are important to the organization and under the control of an employee holding that position.
SG&A
Selling, general, and administrative costs; the period costs of the business.
standards
Benchmarks against which actual productive activity is compared.
theory of constraints
(TOC) Efficiency is improved by seeking out and eliminating constraints within the organization.
total quality management
(TQM) A process for continuous improvement by focusing on customer service and systematic problem solving via teams made up of front-line employees.
variances
Deviations from the norm that may provide warning signs of situations requiring corrective action by managers.
work in process
Goods that are in production but not yet complete; an accumulation of monies spent on direct material, direct labor, and applied manufacturing overhead.
