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BEC > Section 6: Planning, Control, and Analysis > Flashcards

Section 6: Planning, Control, and Analysis Flashcards

1
Q

Strategic Planning

A

Long term overall goals and policies

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2
Q

Tactical Planning

A

Short term objectives and temporary techniques

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3
Q

Tactics

A

Specific actions to meet goals

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4
Q

Master Budget

A

Budget at one level production

Static Budget but for the whole company

Summarizes the Operating and Financial Budgets

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5
Q

Static Budget

A

Analyze conditions for a specific level of activity (what would our labor costs be if sales were at X?)

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6
Q

Operating Budget

A

Income Statement

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7
Q

Financial Budget

A

Capital budget, cash budget, B/S budget, etc.

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8
Q

Kaizen Budget

A

Budget with improvements that have not been implemented yet

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9
Q

Preparing a Master Budget

A
  1. Est. Sales Volume
  2. Use Est Sales Volume to est. Revenues
  3. Use collection histories to est. collections
  4. Est. Cost of Sales based on # of units sold
  5. Use Current Fin Inventory, budgeted end inv., & cost of sales to eat the # of units to be manufactured
  6. Use units manufactured to est. material needs, labor costs, & O/H costs
  7. Use material needs, current raw inv., and budgeted end inv. to budget purchases
  8. Use purchase terms to eat. payments
  9. Analyze expenses & payment patterns to complete operating & cash budgets
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10
Q

Budgeting Material Purchases & Payments

A 
Units Sold
\+ Budgeted increase in FG
- Budgeted decrease in FG
= Units to be Manufactured
* Units of RM per unit of FG
= Units of RM req. for production
\+ Budgeted increase in RM
- Budgeted decrease in RM
= Budgeted RM purchases
\+ Budgeted decrease in A/P
- Budgeted increase in A/P
= Budgeted payments for RM
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11
Q

Production Budget

A 
Budgeted Sales
\+ Desired End Inv. of FG
= Total Needs
- Beg. Inv. of FG
= Number of Units to be produced
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12
Q

Order Budgets are Prepared

A

Sales
Production
RM Purchases
Cash Disbursements

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13
Q

Flexible Budget Equation

A 
Y = a + (b * X)
TC = FC + (VC * X)

Y is dependent
X is independent (cost driver)

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14
Q

Correlation Coefficient

A

p

Between -1 and 1

Close to -1, strong inverse relationship

Close to 1, strong direct relationship

Close to 0, no reliable relationship

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15
Q

Coefficient of Determination

A

R^2

“Goodness to Fit of the line”

Btw 0 and 1

Closer to 1 is a better fit

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16
Q

Responsibility Accounting

A

Evaluate managers’ and divisions’ performance

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17
Q

Cost center

A

Manager is responsible for the costs incurred by that center

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18
Q

Profit Center

A

Manager is responsible for both (1) the revenues earned and (2) the costs incurred by that center

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19
Q

Investment Center

A

Manager is responsible for all of (1) the revenues earned, (2) the costs incurred, and (3) the capital investments from each center

20
Q

Value-Adding Costs

A

Costs there actually make the product test or make it better for customers

21
Q

Non Value-Adding Costs

A

Ex: Moving, handling, storage, factory utilities, or depreciation of manufacturing equipment

22
Q

Direct Allocation of Service Department Costs

A

Service Dept costs directly to production dept

23
Q

Step Allocation of Service Department Costs

A

Service to service to Production

  1. Rank Service dept. from those that service the most to the least
24
Q

Standard Deviation

A
  1. Determine Arithmetic Avg Return
  2. Calculate the diff. from the avg for each individual period
  3. Square those differences
  4. Determine the avg. of those squared values
  5. Calculate the square root of this avg.
25
Q

5 Processes of Project Management

A
  1. Project Initiation
  2. Project Planning
  3. Project Execution
  4. Project Monitoring and Control
  5. Project Closure
26
Q

4 Basic Elements that Project Leaders must manage

A
  1. Resources
  2. Time
  3. Money
  4. Scope (Project’s size and goals)
27
Q

Project Initiation

A
  • Select promising projects
  • identify goals
  • Approval of projects from mgt.
  • Select project leader
28
Q

Project Planning

A
  • Determine tasks to accomplish
  • Set expected qty & qlty production parameters
  • Budget req. funds, personnel, materials, equip
  • Determine begin and end dates
  • Consider the risks
29
Q

Statement of Work (SOW)

A

describes in narrative form the work to be carried out

-Includes project specifications - man hours, materials, and equip.

30
Q

Milestone Schedule

A

List beg., end, and other important dates

31
Q

Work Breakdown Structure (WBS)

A

Breaks down project into parts that may be carried out separately, and thus budgeted for, manages and assessed separately

32
Q

Life-Cycle Approach

A

Splits the planning of a project into separate stages

33
Q

3 Characteristics of Derivatives (NUNS)

A
  1. No net investment
  2. an Underlying and a Notional amount
  3. net Settlement
34
Q

Fair Value Hedge

A

Hedge against changes in the value of an asset or liability that the firm has or expects to have

35
Q

Cash Flow Hedge

A

Hedge against fluctuations in future cash flows

36
Q

Foreign Currency Hedges

A

Hedge against the effects of fluctuations in the value of a foreign currency on the value of assets, liabilities, or cash flows

37
Q

Fair Value G/L

A

change income statement

38
Q

Cash Flow G/L

A

changes OCI

39
Q

Speculation

A

Changes income statement

40
Q

Foreign currency hedge

A

changes OCI

41
Q

Financial Perspectives

A

involves measures of profitability

42
Q

Customer Perspectives

A

customer satisfaction

43
Q

Internal Business Process

A

,assure averages and variances in the cost, time, and # of defects involved in producing and delivering the product

44
Q

Learning & Growth Perspectives

A

employee satisfaction, training, and advancement

45
Q

Economic Value Added

A

EVA = NOPAT - Cost of Capital

BEC (8 decks)

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