Section 6 - Planning, Control & Analysis Flashcards
What is the formula for Budgeting Materials Purchases & Payments?
What is the formula for Production Budget?
Budgets must be prepared in the following order..
- Sales Budget
- Production Budget
- Direct/Raw Materials Purchases Budget
- Cash Disbursement Budget
- Budgeted Financial Statements
What is conformance costs?
How is it calculated?
Defined: cost of conforming to quality control standards
Calculated: Prevention Costs + Appraisal Costs
What is Nonconformance costs?
How is it calculated?
Define: Cost of failure of quality controls
Calculated: Internal + External Failure Costs
What is Correlation Coefficient?
Measures the relationship between two variables (dependent variable(Y) and independent variable (X) at a time
What are the ranges of correlation coefficient?
- -1 = perfect negative correlation
- +1 = perfect positive correlation
- 0 = no correlation
If a manager is only responsible for costs, the area of responsibility is called a _______ ?
Cost center
If a manager is responsible for both revenues and costs, the area of responsibility is called a _______ ?
profit center
If a manager is responsible for all revenues, costs, and capital investments, the area of responsibility is called a _______ ?
Investment center
Define value-adding costs and non-value adding costs?
value adding costs are those costs that actually make the product or make it better for customers.
Non-value adding costs are those costs that increase the costs of a product but that customers do not specifically value
On a balance scorecard, what is an internal business process perspective?
It measures the averages and variances in the cost, time, and number of defects involved in producing and delivering a product or service
On a balance scorecard, what is an financial perspective?
Involves measures of profitability, revenue, or asset growth, and soundness
On a balance scorecard, what is a customer perspective?
Measures customer satisfaction and retention
On a balance scorecard, what is a learning and growth perspective?
Seeks to ensure that key drivers of organizations’ long-term ability to carry out their mission are not negletcted in the pursuit of shorter-term objectives.
