BEC Homework 2.2 Flashcards Preview

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Flashcards in BEC Homework 2.2 Deck (42)
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1
Q
Master budget
A
Master budget is overall budget consisting of many smaller budgets that is based on one level of production. The master budgets include the entire company
2
Q
Flexible budget
A
IT can be prepared for any production level within a relevant range. It is a series of budgets based on different activity levels within the relevant range. It is appropriate for any activity that has variable costs. They give management the opportunity to compare actual results to the budget for the activity level achieved
3
Q
Volume overhead efficiency variance
A
Budge table variable based on standard hours =Standard Direct labour hours allowedxStandard overhead variable rate
Budgeted Variable OH=Actual labour hoursx standard OH variable rate
(OR)
SH-AHxSR
4
Q
production volume variance
A
(Actual units produced - Budgeted units produced) x Budgeted overhead rate
AUP-BUPxBOHPU
5
Q
Material price variance
A
AP-SPxAQ
6
Q
Variable spending OH Variance
A
Budget variable -actual
7
Q
Strategic business unit SBU
A
Responsibility from highest order Investment SBU-profit-revenue-cost
8
Q
Balance score card
A
Reports management info regarding organizational performance as defined by critical success factors. These critical success factors are often classified as human resources business processes, customer satisfaction, and financial performance to demonstrate no single dimension of organizational performance can be relied upon to evaluate success.Criticalsucess factors...Financial,Internal business process, customer and human resource considrations. It integrates financial with non-financial measures. Innovation is the perpective Defined by balance score card
9
Q
ROI
A
Evaluates business performance in terms of the dimensions of revenue expense and investment the measurement all are financial
10
Q
KAIZEN
A
Kaizen is synonomous with continuous improvement but not multidimensional
11
Q
Market value added
A
Contemplates to the degree to which management actions improve stockholders value
12
Q
Investment Center
A
Investment center is most likely an independent business
13
Q
Successful responsibility accounting system
A
A reasonable separation of costs into their fixed and variable components since fixed costs are not controllable and must be eliminated from the responsibility report
14
Q
Financial and non financial measures
A
Financial and non-financial features of an organization that contribute to its success in achieving strategy are referred to as critical success factors and are normally classified as: 1. Financial solvency and return, 2. Customer satisfaction, 3. lntemal business processes, and 4. Human resource innovation.
15
Q
what all will be included in performance measures
A
A user focus
specific time horizons
exceptional items that are controllable
16
Q
Authoritattive standerds
A
Standereds imposed by management without employee input
17
Q
Participative standards
A
Standerds imposed by management with collaboration to employee input
18
Q
Ideal Standerds
A
Are based optimum condition
19
Q
Attainable standards
A
per unit budget with normal conditions
20
Q
The information in COGM Budget would directly relate to
A
Material used, Direct Labour, OH applied and finished goods
21
Q
firm develops an annual cash budget in order to
A
Avoid the oppertuity cost of noninvested excess cash and minimize the cost of interim financing. It is don't after all budgets have been prepared. Cash budget is not for the need of internal financing. Cash budget must be completed before the forecasted balance sheet. Statement of cash flows is the last proforma statement prepared . because all the other things or budgets affects cash.
22
Q
The financial budget process include
A
cash and capitol purchase budgets and balance sheet and statement of cash flows.
23
Q
difference between Flexible budget and static budget
A
A flexible budget provides cost allowances for different level of activity. cost budget provides budget for one level of activity. Both budgets can be prepared by any level of management. Both budgets are used for planning . Both include variable nad fixed costs/
24
Q
For a company that produces more than ne product
A
sales volume variance can be divided into sales quantity and sales mix
25
Q
Learning and growth
A
Employee satisfaction and retention
26
Q
Two way material price variance
A
Actual quantity x Actual price -Actual quantity x Standard price = difference
Standard quantity allowed x standard price - actual quantity used x standard price
27
Q
Controllable margin
A
controllable margin is computed as contribution margin less controllable fixed costs
28
Q
The customer perspective of a balance score card which examines a comapnys sucesss in a targeted market
A
customer.
The financial perspective is concerened with the capture of the increased market share
internal busiess prospects of a balanced score card is concerned with maintaining low costs.
the learning and growth is tied to reward and recognition
29
Q
Flexible budget variance
A
Actual- Flexible budget actual
30
Q
Volume variance
A
Flexible budget actual- Volume variance
31
Q
Spending variance
A
Actual hours X actual rate- actual hours X standerd rate
32
Q
Fixed O/H Volume variance
A
Fixed OH Rate x actual production- Fixed overhead rate x Standard production
33
Q
Material efficiency variance can be caused by
A
actions of the purchasing department
design of the product
skill level of the labor force
34
Q
production volume variance is due to
A
difference in the planned level of the base used for overhead allocation and the actual level achieved. production volume variance is the variance in an absorption costing system that measures the departure from the denominator level of activity that was used to set the fixed overhead rate.
35
Q
efficiency variance
A
production volume variance is the variance in an absorption costing that measure the denominator level of activity that was used to set the fixed OH rate
36
Q
Variable overhead spending variance
A
is most controllable by plant manager and somewhat by production control
37
Q
Discretionary costs
A
are costs arising from periodic budgeting decisions by management to spend in certain areas not directly related to manufacturing
38
Q
Incurred marginal costs
A
are the sum of variable and avoidable fixed costs necessary to have one unit increase in activity
39
Q
Opportunity costs
A
is the maximum benefit foregone by using a scarce resource for a given purpose. it is the benefit provided by the next best use of that resource
40
Q
Residual income
A
is income excess of a fixed return of a invested capitol
41
Q
Least associated with target pricing
A
price stability, price justification fixed cost recovery
42
Q
costs relevant to made or buy decision include variable material variable labor
A
avoidable fixed costs