Unit 3 Management Decisions Based on Accounting Information Flashcards
(ABC) A costing system for situations where overhead is high and/or a variety of products are produced; costs are traced to activities and then activities are allocated to production
Activity-Based Costing
(B2B) A system that enables data interchange between companies; sometimes sufficiently robust to permit automatic inventory replenishment, etc.
Business to Business
A planning tool that outlines the financial plans for an organization; there are various types of budgets – operating, capital, and financial
Budget
(CFM) a professional designation of competency in the field of financial management that is issued by the Institute of Management Accountants
Certified Financial Manager
(CGMA) sponsors a designation that distinguishes professionals who have advanced proficiency in finance, operations, strategy and management
Chartered Global Management Accountant
(CMA) a professional designation of competency in the field of management accounting that is issued by the Institute of Management Accountants
Certified Management Accountant
The primary person responsible for the cost and managerial accounting functions
Controller
Cost components needed to change raw materials to finished goods, specifically direct labor and manufacturing overhead
Conversion Cost
The process by which an organization’s cost is collected, assigned, and interpreted
Cost Accounting
The amount of cost attributable to goods reaching the end of production; beginning work in process (wip) + (direct materials, direct labor, manufacturing overhead) - ending wip
Cost of Goods Manufactured
Gross wages paid to those who physically and directly work on the goods being produced
Direct Labor
The costs of all materials that are an integral part of a finished product and that have a physical presence that is readily traced to that finished product
Direct Material
(ERP) Comprehensive database software that tracks an almost endless array of business and accounting data
Enterprise Resource Packages
Finished goods represent the cost of completed products awaiting sale to a customer
Finished Goods
(IMA) a professional association for management accountants that sponsors the CMA and CFM designations
Institute of Management Accountants
Product costs that attach to inventory
Inventoriable Cost
A costing approach whereby actual labor and material is tracked for each job or product
Job Costing Method
(M2M) enables connected devices to communicate with each other
Machine to Machine
All costs of manufacturing other than direct materials and direct labor (also called factory overhead)
Manufacturing Overhead
A cost not attributable to the acquisition or manufacture of inventory; expensed as incurred
Period Cost
Product costs that are direct in nature; direct materials and direct labor
Prime Cost
A product costing method particularly well suited to situations where production occurs in a continuous process; costs are pooled and assigned to aggregate output
Process Costing Methods
Costs that attach to a product; the summation of direct materials, direct labor, and factory overhead
Product Cost
The components that will be used in manufacturing units that are not yet started – also known as direct materials
Raw Materials
(RFID) Micro processes embedded in inventory that emit radio frequency signals that enable a computer to automatically track inventory
Radio Frequency Identification
A system for evaluating elements that are important to the organization and under the control of an employee holding that position
Scorecards (Balanced)
Selling, general, and administrative costs; the period costs of the business
SG&A
Benchmarks against which actual productive activity is compared
Standards
Development without depletion of natural resources or negative effects on the environment
Sustainability
(TOC) Efficiency is improved by seeking out and eliminating constraints within the organization
Theory Of Constraints
(TQM) A process for continuous improvement by focusing on customer service and systematic problem solving via teams made up of front-line employees
Total Quality Management
Deviations from the norm that may provide warning signs of situations requiring corrective action by managers
Variances
Goods that are in production but not yet complete; an accumulation of monies spent on direct material, direct labor, and applied manufacturing overhead
Work In Process
