Midterm

Question 1

Planning

Answer 1

•Identify alternatives
- develop budgets to guide progress toward the selected alternative

Question 2

Directing and motivating

Answer 2

Directing and motivating involves managing day to day activities to keep the organization running smoothly.
• employee work assignments.
• Routine problem solving
• conflict resolution
• effective communications

Question 3

Controlling

Answer 3

To control function ensures that plans are being followed.
- performance reports

Question 4

Decision making

Answer 4

The most basic managerial skill is the ability to make intellegent,data driven decisions. Many of these decisions revolve around these three questions
. What should we be selling?
. Who should we be serving?
. How should we execute?

Question 5

Big Data

Answer 5

Big Data refers to large collections of data that are gathered from inside or outside a company to provide opportunities for ongoing reporting and analysis.

Question 6

What are the 5 v’s

Answer 6

Variety, volume, velocity, veracity, value

Question 7

Descriptive analytics

Answer 7

What happened?

Question 8

Diagnostic analytics

Answer 8

Why did it happen?

Question 9

Predictive analytics

Answer 9

What will happen?

Question 10

Prescriptive analytics

Answer 10

What should I do?

Question 11

Strategy

Answer 11

A strategy is a “game plan” that enables a company to attract customers by distinguishing itself from competitors.

Question 12

Ethics

Answer 12

•Confidentiality
• Integrity
• Objectivity

Question 13

What three categories are manufacturing costs divided into?

Answer 13

• Direct materials
• Direct Labour
•Manufacturing Overhead

Question 14

Direct materials

Answer 14

Direct materials are those that become an integral part of a product and can be easily traced.

Question 15

Indirect materials

Answer 15

Included in manufacturing overhead, can not be easily traced and are not worth tracing.

Question 16

Direct labour

Answer 16

Labour costs that can be easily traced.

Question 17

Indirect labour

Answer 17

part of manufacturing overhead, not worth tracing and not easy to trace.

Question 18

Manufacturing overhead

Answer 18

Includes all costs of manufacturing except direct materials and direct labour.

Question 19

Prime Cost

Answer 19

Direct materials, direct labour

Question 20

Conversion costs

Answer 20

Direct labour, manufacturing overhead

Question 21

Product costs

Answer 21

Include direct materials, direct labour and manufacturing overhead.

Question 22

Period costs

Answer 22

Include all selling costs and administrative costs

Question 23

Total variable cost

Answer 23

Change when activity changes.

Question 24

Total fixed costs

Answer 24

Remain unchanged when activity changes

Question 25

Relevant Range

Answer 25

The relevant range is the range of activity within which the assumptions about variable and fixed cost behaviour are valid.

Question 26

Sunk costs

Answer 26

Sunk costs have already been incurred and cannot be changed now or in the future. They should be ignored when making decisions.

Question 27

Variable cost per unit

Answer 27

Remains the same over wide ranges of activity.

Question 28

Fixed cost per unit

Answer 28

Average fixed cost per unit goes up and down as activity level goes up.

Question 29

Committed fixed costs

Answer 29

Long-term, cannot be significantly reduced in the short term. Ex) depreciation on equipment.

Question 30

Discretionary fixed costs

Answer 30

May be altered in the short-term by current managerial decisions. Ex ) advertising and research and development.

Question 31

Variable Cost Formula

Answer 31

Change in cost/ Change in activity

Question 32

Account Analysis

Answer 32

Each account is classified as either variable or fixed based on the analyst's knowledge of how the account behaves.

Question 33

Engineering approach

Answer 33

Cost estimates are based on an evaluation of production methods, and materials labour and overhead requirements.

Question 34

Total fixed cost formula

Answer 34

Total fixed cost = total cost - total variable cost

Question 35

Five elements of cost-volume-profit (cvp)

Answer 35

1. Prices of products 2.Volume or level of activity 3. Per unit variable costs 4. Total fixed costs 5. Mix of products sold

Question 36

Contribution Margin Ratio

Answer 36

CM ratio = Total CM / Total Sales

Question 37

Profit formula

Answer 37

Profits = (sales - variable expenses) - fixed expenses

Question 38

Break-even point in units sold

Answer 38

= fixed expenses/ Unit CM

Question 39

Break-even point in total sales dollars

Answer 39

= fixed expenses/ CM Ratio

Question 40

Margin of safety formula

Answer 40

= total sales - breakeven sales

Question 41

Margin of safety percentage formula

Answer 41

= margin of safety in $/ total budgeted (or actual) sales

Question 42

Degree of operating leverage formula

Answer 42

= CM/ operating income

Question 43

Percent change in operating income

Answer 43

= degree of op. leverage x % change in sales

Question 44

Sales mix

Answer 44

The relative proportion in which a company's products are sold.

Question 45

Activity driver

Answer 45

A measure of what causes the incurrence of a variable cost, ex) units produced, machine hours, labour hours.

Question 46

Contribution margin formula

Answer 46

Sales- total variable cost = CM