Throughput Accounting Flashcards

1
Q

What is total quality management?

A

is the continuous improvement in quality, productivity and effectiveness through a management approach focusing on both the process

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2
Q

Fundamental features of the TQM

A
  • prevention of errors before they occur
  • importance of total quality in the design of systems and products
  • real participation of all employees
  • commitment of senior management to the cause
  • recognition of the vital role of customers and suppliers
  • recognition of the need for continual improvement
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3
Q

Key characteristics for Just-In-Time

A
  • high quality
  • speed
  • reliability
  • flexibility
  • low costs
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4
Q

What is the aim of throughput accounting?

A

to make the best use of a scarce resource (bottleneck) in a JIT environment

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5
Q

What means TPAR > 1?

A

throughput exceeds operating costs so the product should make a profit

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6
Q

What means TPAR < 1?

A
  • suggest that throughput in insuffient to cover operating costs, resulting in a loss
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7
Q

How to improve the TPAR?

A
  • increase the sales price for each unit sold
  • reduce material costs per unit to increase the throughput per unit
  • reduce total operating expenses, to reduce the cost per factory hour
  • improve the productivity of the bottleneck
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8
Q

What are the types of the value?

A
  • cost value: cost incurred by the firm incurring the product
  • exchange value: the amount of money that consumers are willing to exchange to obtain ownership of the product
  • use value: related entirely to function
  • esteem value: relates to the status or regard associated with ownership
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9
Q

What is Environmental management accounting?

A
  • is concerned with the accounting information needs of managers in relation to corporate activities that affect the environment as well as environment-related impacts on the corporation
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10
Q

Internal costs of Environmental costs?

A
  • improved systems and checks
  • waste disposal costs
  • product take back costs
  • regulatory costs such as taxes
  • upfront costs such as obtaining permits
  • back-end cots such as decommissioning costs
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11
Q

External costs of Environment costs?

A
  • carbon emissions
  • usage of energy and water
  • forest degradation
  • health care costs
  • social welfare costs
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12
Q

Limitations of the Learning Curve model?

A
  • process is labour intensive
  • the product is new
  • the product is complex
  • production is repetitive and there are no breaks in process
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