Operations Management Flashcards
Breakeven Point
Fixed Costs/Contribution Margin Ratio
T/F: Under direct costing, fixed overhead costs are treated as period costs (i.e. expensed).
TRUE
Prime Costs
Direct materials and labor grouped together
Conversion Costs
Direct labor and factory overhead
4 Types of Variances
Price, usage, rate & efficiency
BPM Life Cycle components
- Design
- Model
- Execute
- Monitor
- Optimize
Reorder Point is the product of what two things?
Usage per day x Lead Time
Cost of Goods Manufactured
COGM = Beginning WIP Inventory + total manufacturing costs - Ending WIP Inventory
Replenishment Point
Avg usage x Lead time + Safety Stocl
Margin of Safety equals sales minus what?
Breakeven Sales
The labor efficiency (usage) variance is the difference between
Standard cost of actual hours and the standard cost of budgeted hours
Production Volume Variance is the product of the fixed overhead rate and what?
Budgeted - Actual Units
Absorption costing treats all manufacturing (variable and fixed) costs as what?
PRODUCT COSTS
Std Price (Sq-Aq)
Usage Variance
Actual Quantity (Sp-Ap)
Price Variance
In allocating service department costs to the operating departments, for which of the following three methods (direct, step-down, and reciprocal) does the order in which the departments are allocated NOT affect the amount allocated to each department?
Direct and reciprocal methods
