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MA and control > In class test > Flashcards

In class test Flashcards

1
Q

Differences between MA and FA

A

legal requirements, focus on diff parts, GAAP, Time, report frequency

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2
Q

legal requirements

A

FA have to be audited and submit accounts

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3
Q

Focus

A

MA can focus on diff segments, FA focuses on everything

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4
Q

Time dimension

A

FA looks at past, MA forward looking, predictiona

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5
Q

Report frequency

A

FA annual basis, MA quarterly or monthly

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6
Q

GAAP

A

FA IFRS ISA, MA doesnt

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7
Q

Functions of MA

A

inventory valuation for int and ext profit measurement. Provide info to help managers make better decisions. Provide info for planning, control and performance measurement.

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8
Q

traceability

A

direct and indirect

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9
Q

function

A

manufacturing, marketing, sales and admin

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10
Q

behaviour

A

fixed, variable, semi fixed

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11
Q

relevance

A

relevant, irrelevant, sunk, opportunity

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12
Q

high low method

A

difference in £/ difference in activity = VC per unit

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13
Q

CVP analysis

A

examines relationship between changes in activity and changes in total sales rev, cost and net profit

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14
Q

breakeven

A

total fixed costs/ contribution per unit

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15
Q

contribution per unit

A

selling price - variable costs

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16
Q

target profit

A

fixed costs + target profit / contribution per unit

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17
Q

contribution margin/ PV ratio

A

PV ratio = contribution per unit / sales price per unit

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18
Q

margin of safety

A

% = expected sales - BE sales/ expected sales

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19
Q

BREAKEVEN HAS

A

4 STEPS

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20
Q

BE step 1

A

calculate contribution per unit

21
Q

BE step 2

A

weight contribution, multiply % by sales mix to give weighted contribution per unit

22
Q

BE step 3

A

use weighted contribution per unit in breakeven formula to give total number of uits

23
Q

BE step 4

A

split out units into products using sales mix

24
Q

uses of ABC

A

product pricing, product emphasis, cost control

25
Q

criticisms of ABC

A

ABC unit costs vary, reported costs may significantly differ

26
Q

ABC system came about because

A

traditional systems arent always appropriate and errors from relying on misleading costs

27
Q

ABC systems can

A

identify the major activities taking place, assign costs, determine cost drivers and assign the cost to products

28
Q

2 types of costing systems

A

marginal/ variable (uses direct costs)

absorption (uses both direct and indirect

29
Q

traditional costing advantages

A

easy to implement and useful for industries with large quantities

30
Q

traditional costing disadvantages

A

assumes indirect costs are directly related to a volume of measure, and companies can make wrong decisions if inaccurate

31
Q

advantages of ABC

A

detailed info, more accurate and can be used for all overheads, not just production

32
Q

disadvantages of ABC

A

timely and costly to implement, may be difficult to allocate overheads

33
Q

why do we use budgeted figures?

A

use this over a longer period of time as normal costs fluctuate monthly

34
Q

expected value

A

Multiply all probabilities by outcome to get weighted amount and add all of them together to get EV.

35
Q

Range

A

difference between largest and smallest value

36
Q

probability of independent events

A

work out probabilities and multiply together

37
Q

Coefficient of variation

A

SD/EV relative measure of dispersion

38
Q

risk seeker

A

seek riskier options even if it causes a loss

39
Q

risk averter

A

choose options with positive outcomes

40
Q

decision trees

A

used to clarify alternative course of actions

41
Q

maximin

A

the worst possible outcome will occur, so select the largest payoff under this assumption

42
Q

maximax

A

the best possible outcome will occur, so select the largest payoff under this assumption

43
Q

regret

A

minimise the value that is lost as a result of not having chosen the best option, if the best possible outcome does not occur

44
Q

standard deviation

A

expected value - (expected profit) * x probability

45
Q

ABC steps 1

A

identify the total overhead costs

46
Q

ABC step 2

A

allocate costs into cost pool and give each an activity driver

47
Q

ABC step 3

A

calculate overhead rate for each activity

total cost/ no. of times activity occurs

48
Q

ABC step 4

A

allocate overheads to products

MA and control (1 decks)

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