Final B3 Flashcards
What is not an example of a cost driver?
Volume-based production
What type of costs is Redesign of process?
Prevention costs
What is a techniques effectively measures improvements in product quality as a result of internal failure costs?
Tracking the number of products reworked
What is an explanation for improved ROA?
The company was more efficient in it use of assets
What is not included in a performance report?
Strategic plan
How do you calc ROE?
NI/E OR
Net profit margin(NI/S)* Asset turnover(Sales/assets) * FL(Assets*Equity)
define product cost
cost assigned to goods that were either purchase or manufactured for resale
Define relevant range
The range over which cost relationships are valid
Is activity based costing allowable for external reporting?
No but Job costing is
How does activity based costing refine cost information?
It Emphasizes LT product analysis (When fixed costs become variable costs)
What company would benefit the most from using ABC system?
When indirect costs are a high percentage of total costs
Describe a fishbone diagram
Describes a process, the contributions to the process, and the potential problems that could occur at each phase of a process
What is a financial measure of success in a balance scorecard?
Sales growth
What is the chart that is used to determine zero defects and goalpost conformance?
Control chart
Define Controllable margin
Contribution margin net of controllable fixed costs
What are appraisal costs and what are some examples of Appraisal costs?
Costs to detect individual products that do not conform to specification
Ex:
- Statistical quality checks
- Inspections
- Testing
- Maintenance of lab
What part of the balance scorecard is related to employee satisfaction?
Learning and growth
What ratio would you use to evaluate profitability of companies of different sizes?
ROA (NI/avg assets)
What method would be best suited to value performance a firms capital in any year?
Economic value added
=
Net Operating Profit After Taxes(NOPAT) and compare to Required return for capital
What is residual income
Income in excess of Desired minimum return
What is the formula for residual income?
Net income
LESS required return(NBV*hurdle rate)
What is the formula of economic value added
after tax income
LESS: required return
Why is residual income a better performance evaluation over ROI?
RI measures actual dollars of an investment over its ROR
Desirable investment decisions will not be neglected by high-return divisions
What costs would decrease if production levels were increase within the relevant range?
Fixed costs per unit
What are the 4 components of a balance scorecard?
- Learning and growth - HR/People
- Customer satisfaction
- Financial
- Production - efficient
company should run better and profitably
