MCQ's Flashcards
big data is often characterised by 5vs which are
Volume
Value
Variety
velocity
veracity
what is a balanced score care
used to measure non-financial performance
- 4 aspects, financial, learning growth, internal processes, customer relationships
- takes a wholistic view of looking at the performance of the business
- financial look at ratios, liquidity, profitability, operational and investment ratios
-learning and growth, introduce new technologies and innovation to develop the business
- internal process, looking at efficiency and effectiveness of operations
- customer relationships, use online reviews and customer surveys, assess results and implement changes. customer service training, improving retainment of current customers
calculation for ROI - return on investment
Profit/initial investment
building block Fitzgerald and moon 3 aspects
dimensions, standards and rewards
what is calculation for contribution
sales price - variable costs
what is the calculation for breakeven revenue
(fixed costs/contribution) X selling price
calculate margin of safety %
quantity sold - (fixed costs/contribution) / quantity sold X 100
what is a limiting factor
anything that constrains a populations size and slows or stops its from growing
when analysing production levels with multiple limiting factors, the objective function is best described as
a formulaic description of the contribution to be made from different levels of production
calculate sales price variance
Actual price - sales price X actual quantity
calulate sales volume variances
Actual quantity - budgeted quantity X contribution per unit
reasons for variances listed
material price variance £5,000 F
material usage variance £3,200 A
1) purchase manager has spent a month ensuring that we purchase material upfront in bulk which has meant we have qualified for more discounts
2) we had had a lot of staff turnover recently in the factory so staff are less experienced with our production techniques
calculate sales margin increase 20%
labour +
material +
labour overhead rate (labour rate/L-cost X overheads)
= total X 100/80 (100% less percentage increase)
calculate sales mark up increase of 20%
Labour
Material
Labour overhead rate (labour rate/labour cost X overheads)
= total X 1.2 (100% plus increase)
what are the different pricing strategies
premium pricing
differentiated pricing
Price skimming
market penetration pricing
how can cost gap be decreased
by finding efficiencies in production
what is an advantage of bottom-up budgeting
- budgets should contain better/more realistic information
- senior management are able to focus on strategic direction and issues
-increase motivation and commitment from more junior staff
what is bottom-up budgeting
lower down management such as department managers build budgets,
-can cause budgeting slack if budget is too low+less experienced
-localised knowledge is used to create budget
top down budgeting
top management prepares high level of budget for the company,
-lower management often feel demotivated (Maslow hierarchy of needs, the need to feel valued in work)
-experienced managers building the budget
Zero based budgeting
all activities start at 0, this is typical of new companies
-gets rid of slack and allows prioritisation
-time consuming, demotivating to keep justifying %
incremental budgeting
take data from previous year and increase by %
- can be hard to define %increase that is accurate.
-is cheap, quick
calculate high low costing method
1st work out Variable cost per unit
(highest activity cost - lowest activity cost)/
(highest activity units - lowest activity units)
2nd work out fixed cost
highest activity cost - (variable cost per unit X highest activity units)
ABC costing is an alternative costing method to
traditional overhead absorption costing
and is more realistic picture of cost behaviour
operational planning is
day to day management (supervisor and rots)
tactical plannign
middle managers
strategic planning
top level of managers (when stores are opened and closed)
business planning
top level
what is price elasticity
a measurement of the change in the consumption of a product in relation to a change in its price
a score between 0-1 is seen as inelastic
greater than 1 it is elastic
what is the law of demand state
when the price of a product goes up, the quantity demanded will go down
what is the theory of target costing
estimates the product cost by subtracting a desired profit margin from a competitive market price
breakeven revenue formula
fixed costs / sp- fixed costs X sp
what is mixed price variance
AMP X AP - AMP X SP
how to work out yield variance
work out wastage%
diff / produced X 100
100 minus % = efficiency level
overall produced X efficiency level
actual - previous answer = … X standard price per unit
Who is tactical planning
Middle managers (management accountant)
Who deals with day to day planning
Supervisors (operational planning)
Who deals with strategic planning
Top level managers
Who deals with business planning
Top level managers
what is the maximax rule
the result that maximises the maximum profit
goes for highest production despite the demand
risk seeking route
maximin
alternative that maximises the minimum pay-off achievable
lowest demand highest profit
minimax
strategy is the one that minimises the maximum regret
