Definitions Flashcards
Absorption Costing
Is GAAP, Fixed manufacturing overhead is a product cost
Access Controls
Limit access to program documentation, data, programs and hardware
Access Point
Connects communication devices to form a wireless network
Accounting Information System
Type of management information system. partly a transaction processing system and partly a knowledge system.
Accounting profit
Total revenue - explicit costs
Activity Based Costing
Divides production into activities where costs are accumulated into multiple pools and allocated to product based on level of activities
Ad Hoc Reports
Report that does not currently exist but can be created on demand
Aggregate Demand
Maximum quantity of all goods and services that households, firms and gov’ts are willing and able to purchase at any given price. Quantity of goods and services demanded increases as prices decline. Factors that shift the curve are wealth, real interest rates, consumer confidence, exchange rates, govt spending, taxes
Aggregate Supply
Maximum quantity of goods that providers are willing and able to produce at any given price. Firms are willing to produce more goods at higher prices. Shifts are caused by changes in resource prices and supply shocks
Application firewall
Examines data in the packets themselves
Appraisal Cost
Costs to discover and remove defective parts before they are shipped to customer
Capital Rationing
Used when investment funding is limited. Capital is rationed amongst competing projects by using a higher cost of capital or by setting a maximum for the entire capital budget.
Cold Site
For disaster recovery - an off site location that has all the electrical connections and other physical requirements but no actual equipment
Contribution Margin
Sales - Variable Costs
Conversion Costs
Direct Labor and Manufacturing Overhead
Cost Push Inflation
Caused by reductions in short run aggregate supply
Data Administrator
Responsible for the definition, planning and control of the data within a database
Data Mart
Limited Scope data warehouse
Database Administrator
Responsible for maintaining and supporting the database software. May also perform some or all of the security functions for the database
Debenture
Unsecured bond
Demand pull inflation
Caused by increases in aggregate demand
Denial of Service Attack
One computer bombards another with a flood of information intended to keep legitimate user from accessing the target computer
Differential Costs
Difference between two alternatives
Direct Costs
Costs that can be identified or traced to cost object
Direct labor efficiency variance
Standard rate x Actual Hours - Standard rate x standard hours
Direct labor rate variance
Actual Hours x Actual Rate - Actual Hours x Standard Rate
Direct Material Price variance
Actual Quantity x Actual Price - Actual Quantity x Standard Price
Direct Material Usage variance
Standard Price x Actual Quantity - Standard Price x Standard Quantity
Economic Order Quantity
Order quantity that minimizes the combo of ordering and carrying costs
Engineered Costs
Have a causal relationship between the incurrence and the output
Explicit Costs
Documented out of pocket costs
Extranet
Permits outsiders to have direct access to company’s network
Financial Leverage
The degree to which a firm uses fixed financial costs to magnify the effects of a given percentage change in earnings before interest and taxes
Frictional Unemployment
Results from workers routinely changing jobs or from workers being temporarily laid off
Hot Site
For disaster recovery - off site location equipped with everything needed to begin transaction processing
Ideal Standard
Standard costs that result from perfect efficiency and effectiveness
Incremental Costs
Difference between two alternatives
Internal Failure Costs
Costs to cure a defect before the product is sent to customer
Kaizen
Is continuous improvement. Implemented by improving every aspect of a business practice in a step by step approach while gradually developing employee skills. HR is most important firm asset, processes must evolve by gradual improvement, improvement based on quantitative performance
Kinked demand curve
The demand curve of an oligopolist
Liquidity Risk
Risk that a security will not be able to be sold quickly without large price concession
Lockbox
Payment collection system in which payers send their payments directly to bank
Long Run Aggregate Supply
The economy’s maximum rate of sustainable output given its current resource base, level of technology, and institutional arrangements. It is the optimal productive capacity of the economy that is dictated by the fixed PPE assets currently in place
Management Information System
Provides managerial and other end users with reports
Mapping
the process of determining the correspondence between data elements in an organization’s terminology and data elements in standard EDI terminology
Margin of Safety
Excess of sales over sales at breakeven point
Marginal Cost
The change in total cost due to one unit increase in output
Marginal Product
Change in total product due to one unit increase in quantity of variable input
Marginal Propensity to Consume
The change in consumption due to a $1 increase in income
Market Equilibrium
State in which there are no forces acting to change the current price/quantity combination of a good or service
Market Risk
Risk of an individual stock or in a portfolio that cannot be eliminated by diversification
Market Size Variance
Budgeted Contribution Margin per Unit x Budgeted Market Share x (Actual Market Size - Expected Market Size)
Market Share Variance
Budgeted Contribution Margin per Unit x Actual units sold x (Actual Market Share - Budgeted Market Share)
Maturity Risk Premium
Interest premium to compensate investors for a longer maturity of bonds
Mirroring
The use of a backup computer to duplicate all of the processes and transactions on the primary computer. If primary fails then backup takes immediate place
Money Market Hedge
Simultaneous borrowing and lending transactions in two different currencies to lock in the domestic currency value of a foreign currency
Monopolistic Competition
Market consists of many firms selling a slightly differentiated product. Few barriers to entry
Monopsony
Only one buyer. In a labor market - only one employer
Monopoly
Consists of one firm that is the only seller of a product. Significant barriers of entry and no close substitutes for the good sold by the monopolist. Monopolists are price setters
Oligopoly
Consists of small number of firms selling similar products. There are significant barriers to entry and strong interdependence
Operating Leverage
The degree to which a firm uses fixed operating costs to magnify the effects of a given percentage change in sales on the percentage change in earning before interest and taxes.
Operating Risk
Risk of doing the right things in the wrong way
Perfect Competition
Large number of sellers each of which sells a nearly identical product. Few barriers to entry and firms are price takers
Phishing
Sending of phony e-mails to lure people to phony websites asking for information
Prevention Costs
Costs to prevent the production of defective units. Include inspection, preventive maintenance, redesign of products and processes
Price Floor
Minimum price - If price floor is set above the equilibrium price in a market a surplus will develop
Recession
Economy experiences negative real economic growth for two consecutive quarters
Structural Unemployment
Arises when the skills of workers do not match the skills demanded
System Analyst
Charged with the design of an internally developed application system and the type of computer network needed.
System Programmer
Responsible for installing, supporting, monitoring and maintaining the operating system
Transaction Exposure
Risk that a firm could suffer economic loss or experience economic gain upon settlement of individual transactions as a result of foreign exchange rates
Translation Exposure
Risk that a company’s equity, assets or income will change in value as a result of a foreign exchange rate changes
Steps in Value Chain Analysis
1) Id value chain activities
2) Id cost drivers
3) Develop competitive advantage by reducing cost or adding value
Vertical Integration
Improvement of a value chain through the supply end and the demand end in the same industry
Warm Site
Facility that is stocked with all the hardware necessary to create a reasonable facsimile of primary data center
