Planning, Control & Analysis

Question 1

kaizen budget

Answer 1

id small improvements

rather than major breakthrough or large structural changes

Question 2

order that budget must be prepared in

Answer 2

1. sales
2. production
3. direct/raw material purchase
4. cash disbursement
5. budgeted fs (budgeted - I/S,CF, BS)

Question 3

variable cost rate

Answer 3

= variable cost/sales

Question 4

p =

Answer 4

coefficient of correlation

b/w -1 and +1

Question 5

p closer to -1 or +1,

Answer 5

stronger the relationship b/w 2 variable

Question 6

p closer to -1

Answer 6

very strong INverse relationship

Question 7

p closer to +1

Answer 7

strong DIRECT relationship

Question 8

p closer to 0

Answer 8

no relationship b/w variables

Question 9

slope from bottom left to top right

/

Answer 9

+1

direct

Question 10

slope from top left to bottom right

Answer 10

-1

indirect

Question 11

scatter graph of dots

Answer 11

0

no relationship

Question 12

cost center manager

Answer 12

responsible for cost incurred

Question 13

profit center manager

Answer 13

responsible for

1. revenue
2. cost incurred

Question 14

investment manager

Answer 14

responsible for

1. revenue
2. cost incurred
3. capital investment from each center

Question 15

EVA

economic value added

Answer 15

earnings of investment over its cost of capital

Question 16

nonvalue adding cost

Answer 16

moving
handling
storage of raw mat.
utilities
deprecition 
manufcting equipemtn

Question 17

return on investment

ROI

Answer 17

net income/total asset or avg invested capital

Question 18

DuPont ROI analysis

Answer 18

ROI = return on sales * assets turnover

Question 19

return on sales

Answer 19

net income/sales

Question 20

asset turnover

Answer 20

=sales/total asset

Question 21

residual income

Answer 21

operating profit-interest on investment

Question 22

interest on investment

Answer 22

invested capital * rate of return

Question 23

EVA

economic value added

Answer 23

net operating profit after taxes (NOPAT) - cost of financing

Question 24

cost of financing

Answer 24

= (total asset-current liab) * weighted avg cost of captial

Question 25

ISO 9000 series

International organization of standards

Answer 25

5 parts: 9000 to 9004

focus on QUALITY of products and services provided

Question 26

ISO 14000 series

Answer 26

focusing on environmental goals

Question 27

pareto principle

Answer 27

80% of problems results from only 20% of possible causes

Question 28

six sigma quality

Answer 28

statistical measure of the percentage of acceptable products

to achieve 1 sigma, 68% of products must be acceptable

to acheive 6 sigma, 99.9999997% must be acceptable (perfection in manufacturing)

Question 29

life cycle of business process mgmt

Answer 29

1. design
2. modeling (processes test under ‘what if’ scenarios)
3. execution
4. monitoring
5. optimization

Question 30

activity-based costing system

good for what

Answer 30

companies that produce heterogeneous products (different types)

used to allocate indirect costs

expense of obtaining cost data is relatively high

method for assigning costs by identifying activities and assigning the costs of the activities to the products that generate the activities.

Activity-based costing can be used with either process or job costing.

Question 31

participative budgeting

Answer 31

greater acceptance
more accurate
increases motivation

more time consuming bc decision making process involves both top mgmt and employees

Question 32

regression equation

Answer 32

y = y intercept + B(X)

y = a + bx

a = intercept (fixed cost)
b = variable cost
x = independent variable
y = total cost

Question 33

delphi

Answer 33

Delphi is a structured forecasting method based on the collective judgement of a group of experts. Each expert’s judgment is involved; the forecasts will become more accurate after each round after which experts can revise their previous answer

Question 34

econometric models are

Answer 34

statistical models applying economic theories. Some judgment is involved when applying different economic theories, but the application of the theories is objective

Question 35

regression analysis

Answer 35

Forecasting based on regression analysis is predicts the dependent variable (y) based on the observed behavior of an independent variable (x). As long as the independent variable and other factors are determined, no subjective judgment is involved.

Question 36

Time series models

Answer 36

objectively analyze a sequence of previously observed data to predict future values

Question 37

Business process management involves

Answer 37

the alignment of all aspects of a business with the wants and needs of its customers

Question 38

Strategic planning is

Answer 38

the identification of long-term goals and determination of how best to reach them.

Question 39

Corporate governance involves

Answer 39

ensuring that an entity’s objectives are met while the legitimate needs and concerns of all stakeholders are being addressed.

Question 40

Implementing internal control involves

Answer 40

management establishing a code of conduct and encouraging appropriate behavior by example.

Question 41

balanced score card includes 4 prospectives

Answer 41

1. financial performance,
2. internal operations,
3. learning and growth (innovation)
4. customer satisfaction