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BEC > Planning, Control, and Analysis > Flashcards

Planning, Control, and Analysis Flashcards

1
Q

Business analysis that provides management with profitability estimates at all levels of production in the relevant rannge; based on the firm’s profit function (Profit=Sales-VC-FC)

A

Cost-Volume-Profit (Breakeven) Analysis

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2
Q

The amount of contribution margin (Sales-VC) required to cover the fixed costs

A

Breakeven point

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3
Q

A form of inventory costing that applies variable costs to products sold but considers fixed manufacturing costs as aperiod rather than product cost, expensing all fixed MOH in the period incurred
**not GAAP

A

Variable (Direct) Costing

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4
Q

Inventory costing that treats fixed MOH as product costs and expenses them in the period in which the products are sold (so if not production>sales, some of the MOH will not be expensed that period)

A

Absorption Costing

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5
Q

The process of analyzing hte investment and financing alternatives available, forecasting the furture consequences of hte alternatives, decidng which to undertake, and measuring subsequent performance against established goals

A

Financial Planning

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6
Q

Outputs of the fianncial planning process

A

Pro forma financial statements
Operating and financial budgets
Scenario analysis

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7
Q

Summarizes the results of all of hte firm’s individual budgets into a set of projected financial statements and schedules

A

Master budget

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8
Q

The budgeted income statement and supporting schedules

A

Operating budget

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9
Q

The capital budget, cash budger, and budgeted balance sheet and statemtn fo cash flows

A

Financial budget

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10
Q

Budgets that are continualy updated as time passes

A

Rolling budgets

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11
Q

A budget in which upper-level managment establishes the budget paramters and passes it down through the organization to each operating unit
-quick and clear but doens’t involve lower-level employees

A

Top-Down mandated approach

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12
Q

Budget approach in which the budget is driven by involving lower-level management and employees
–more readily accepted budget by all employees, but management may try to pad their budget

A

Bottom-up (participative) approach

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13
Q

Displays the financial effects of purchases and retirements of long-lived assets–these budgets tend to span several years

A

Capital budget

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14
Q

A form of budgeting that projects costs on teh basis of improvements yet to be implmeented rather than upon current conditions

A

Kaizen budgeting

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15
Q

A form of budgeting that complements ABC by focusing on the costs of activities necessary for production and sales–budgets are formulated around each activity
–gives managfement better insight into what causes costs sothey are in a better position to control them

A

Activity-based budgeting (ABB)

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16
Q

A structured approach to qualitative forecasting that develops consensus among a group about the future through a series of structured questionnairesa nd an iterative process

A

Delphi technique

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17
Q

A quantitative forecasting approach based exclusively o historical observation of sales or other variables

A

Naive model

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18
Q

A quantitative forecasting technique that simply uses the average of sales for hte most recent periods to predict hte next period’s sales

A

Moving average

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19
Q

A quantitative forecasting technique that is similar to moving average but weights more recent sales data more heavily than otder data
–based on the belief that more recent data is more relevant

A

Exponential smoothing

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20
Q

A quantitative forecasting technique that examines prior sales data and estimtaes seasonal and cyclical efects to observe historical trends

A

Decomposition of time series

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21
Q

A quantitative forecasting technique that estimates sales based on an observed relationship between sales (dependent variable) and one or more predictors of sales (independent variable)

A

Regression analysis

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22
Q

A quantitative forecasting techinque that involves the use of regression analysis to model the firm’s sales ased on economic data (i.e. disposable income, interest rates, etc.)

A

Econometric models

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23
Q

A quantitative forecasting technique that attempts to frecast consumer purchasing by considering factors such as brand loyalty and brand switching behavior–wich is used to predict changes in teh firm’s market share

A

Markov technique

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24
Q

The violatin of hte regression analysis assumption that the variance of hte error (residual) term is constant–reduces the reliability of the estimate

A

Heteroscedasticity

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25
Q

Using regression analysis to fit a trend line ot a time series of data

A

Trend analysis

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26
Q

Measures how well the predicted values of hte dependent variable match the actual amounts

A

goodness of fit (measured by the coefficient of determination–Adjusted R Squared)

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27
Q

A measure of significance of the relationship in trend analysis for each indpendent variable

A

T-statistic

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28
Q

A measure of the probablity that the relationship of a variable in a trend anlysis occurred by chance (i.e. if less than 5%, means there is a

A

P-value

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29
Q

Used when management wishes to forecast sales using two or more associated variables

A

Multiple regression

30
Q

The standard deviation of the regression–can be used to establish confidence intervals aroudn the estimate of sales

A

Standard Error

31
Q

Provides an overall measure of hte significance of th eregression equation
–% chance htat hte overall relationship occurred bychance

A

Significanace F

32
Q

In multiple regression when 2 indpendent variables are highly correlated, causing an error in the equation
–signs include lowt-Stats, and negative relationships when they should be positive

A

Multicollinearity

33
Q

In multiple regression, when the errors (regressions) are serially correlated, distorting the results
–a sign would be if a major indpenednet variable is not included in the model

A

Autocorrelation

34
Q

A budget adjusted for changes in volume

A

Flexible budget

35
Q

A manager’s area of responsibility if he/she is only responsible for costs; typically non-revenue generating departments

A

Cost center

36
Q

Area of responsibilty if a a manager is responsible for both revenues and costs

A

Profit center

37
Q

Manager is responsible for revenues, costs, and asset investment

A

Investment ccenter

38
Q

Allocating those revenues and/or assets which a manager can control to that manger’s responsibility center and holding htat manger accountable for operating results

A

Responsibility Accounting

39
Q

Sales- Variable manufacturing costs

A

Manufacturing contribution margin

40
Q

Manufacturing contribution margin (Sales-VC)-Variable S&A

A

Contribution Margin

41
Q

CM-Fixed costs controllable by segment managers

A

Controllable contribution

42
Q

Controllable Contribution-Fixed costs controllable by others

A

Segment contribution

43
Q

Predetermined target costs which should be attainable under efficient conditions; used to aid in the budget process, pinpoint trouble areas, and evaluate performance

A

Standard Costs

44
Q

Standards that reflect hte absolute minimum costs which could be achieved under perfect operating conditions

A

Ideal standards

45
Q

Standards that should be achieved under efficient operating conditions

A

Currently attainable standards

46
Q

The standard quantity of input that should have been used for hte good units produced

A

Standard Quantity

47
Q

AQ (AP-SP)

Unfavorable if AP>SP

A

Price Variance

48
Q

SP(AQ-SQ)

Unfavorable if AQ>SQ

A

Quantity (usage) Variance

49
Q

The most common base used to apply overhead to production

A

direct labor hours (DLH)

50
Q

REquires that fixed overhead costs be allocated based on normal capacity and variances related to fixed overhead volume should be allocated only to COGS (i.e. treated as a period cost)

A

SFAS 151

51
Q

A document that authorizes the project and sets forth the project managers authority and responsibility

A

Project charter

52
Q

A document that sets forth the scope of the work jn a narrative description of the work to be performed and the deliverables

A

Statement of Work (SOW)

53
Q

A detailed listing of the man hour, equipment, and material requirements

A

Project specs

54
Q

Sets forth the start date, the end date, and other major milestones involved in completing the project

A

Milestone schedule

55
Q

Breaks the project into manageable, independent, and measurable elements that can be budgeted and for which responsibility can be assigned

A

Work breakdown structure (WBS)

56
Q

A project planning approach in which project planning is divided into defined phases and an assessment is done at the end or each phase

A

Life-cycle approach to project planning

57
Q

A type of bar chart that illustrated the scheduled start and finish of elements of a project over time

A

Gantt chart

58
Q

A type of chart that illustrates the milestones for a project over time

A

Milestone chart

59
Q

A type of chart that illustrates the series of activities that are related–appropriate where a project has a series of repetitive actions

A

Line of balance

60
Q

Illustrates the logical representation of activities that defines the sequence of the work of a project–lots of advantages

A

Network diagram

61
Q

A network diagram that formally focuses on the interdependence of activities and the time required to complete an activity to schedule and control the project

A

Program evaluation and review technique (PERT)

62
Q

The shortest amount of time necessary to accomplish the project

A

Critical patt

63
Q

In PERT analysis, the difference between the expected time and te latest time the activity can be completed without delaying the project

A

Slack time

64
Q

Similar to PERT, but only use one time estimate that represents the normal time to complete an activity-used for projects where there is less variability in time estimates

A

Critical Path Method (CPM)

65
Q

Similar to PERT but has the advantage of allowing looping and branching based on the results of a particular activity–useful for projects that can be completed multiple ways

A

Graphical Evaluation and Review Technique (GERT)

66
Q

A term used describe the practice of adding resources to shorten selected activity time on the critical path of a project —in effect trading money for time

A

Project crashing

67
Q

A short run pricing approach that considers all relevant variable costs plus any additional fixed costs needed to sustain the new production level

A

Contribution margin approach

68
Q

A pricing decision model in which prides are set at variable costs plus a percentage markup

A

Cost-plus pricig

69
Q

Setting prices at the amount customers are wiling to pay based on their perceived value of the product, and then setting target costs based on that and target income

A

Target pricing

70
Q

Examines al components of the value chain to find opportunities for improvements and cost reduction

A

Value engineering

71
Q

When transfers are recorded by the selling subunit at one price while the purchasing subunit records the transfer at a different price

A

Dual transfer pricing

BEC (7 decks)

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