Manufacturing

Question 1

Manufacturing Costs

Answer 1

Activities and processes that convert raw materials into finished goods

Question 2

Include

Answer 2

-Direct Materials
-Direct Labor
-Manufacturing overhead

Question 3

Manufacturing overhead

Answer 3

-costs indirectly associated w/ manufacturing the finished product
-all manufacturing costs except DM & DL
-includes indirect material, indirect labor, depreciation on factory buildings, machines & insurance, taxes and maintenance on factory facilities

Question 4

Direct materials

Answer 4

-basic materials and parts used in manufacturing process
-raw materials that can be physically and directly associated w/ finished goods are direct materials
-syrup in bottling of soda
-flour in baking of bread
-steel in the making of cars

Question 5

Direct labor

Answer 5

-work of factory employees that can be physically & directly associated with converting raw materials into finished goods

Question 6

Just in Time Inventory (JIT)

Answer 6

-goods are manufactured just in time for sale
-companies receive the exact amount of inventory they need right when they need it
-goal is for companies to retain little to no excess inventory

Question 7

Theory of constraints “bottlenecks”

Answer 7

-constraints (bottlenecks) that limit companies potential profitability
-allows management to identify & eliminate constraints in order to achieve company goals

Question 8

Balance Score Board

Answer 8

-Evaluates operations in an integrated fashion
-uses both financial & non financial measures, often expressed as “key performance indicators” KPIs
-links performance to overall company objectives

Question 9

Activity Based Costing (ABC)

Answer 9

-Allocates overhead based on use of activities
-results in more accurate product costing & scrutiny of all activities in value chain

Question 10

Environmental

Answer 10

-renewable fuels
-greenhouse gas emissions
-energy effieciency
-climate risk
-water management
-recycling processes
-emergency prep

Question 11

Social

Answer 11

-health & safety
-working conditions
-employee benefits
-diversity & inclusion
-human rights
-impact on local communities

Question 12

Goverance

Answer 12

-ethical standards
-board diversity
-stakeholder engagement
-shareholder rights
-pay for performance

Question 13

managerial

Answer 13

-internal: officers and managers
-internal reports: as frequently as needed
-special purpose for specific decisions
-pertains to subunits of a business
-very detailed, extends beyond accrual acct
-evaluated based on relevance to decisons
-no idenpendent audits

Question 14

Total variable costs (no operating leverage)

Answer 14

-changes because it is a variable cost
-solve for x
-(cost per unit) (total # of units)

Question 15

Variable costs per unit

Answer 15

-stays the same (opposite) because its per unit
-in this case number stay the same across

Question 16

Total fixed cost (operating leverage)

Answer 16

-stays the same because it is a fixed cost
-numbers stay the same

Question 17

Fixed cost per unit

Answer 17

-changes (opposite) because its per unit
-solve for x
-total fixed costs/ unit

Question 18

Period costs

Answer 18

SG&A Selling, general, administration
-charged to expenses as incurred
-non manufacturing costs
-unrelated to making products

Question 19

Product costs

Answer 19

-cost of goods sold
-DM DL MOH
-costs that are a part of producing a product
-recorded in inventory account
-not an expense until goods are sold

Question 20

Time Quantity management (TQM)

Answer 20

Reduce defects in finished products with goal of zero defects

Question 21

Enterprise Revenue Planning (ERP)

Answer 21

-software programs designed to manage all major business processes