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Flashcards in Exam 5 Deck (11)
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1

compares actual costs with budgeted costs.

performance report

2

Compare actual costs with the budgeted costs for the budgeted level of activity(created in advanced)

static budget

3

enables a firm to compute expected costs for a range of activity levels. The key is to know fixed and variable costs

flexible budget

4

Delegating decision-making authority to the lower levels of management in a company

decentralization

5

-gathering and using information
-focussing of central management
-training and motivating segment managers
enhanced competition, exposing segments to market forces.

reasons for decentralization

6

refers to earnings before interest and taxes.

operating income

7

all assets acquired to generate operating income, including cash, receivables, inventories, land, buildings, and equipment.

operating assests

8

the profit earned per dollar of investment.

return on investment (ROI)

9

s the difference between operating income and the minimum dollar return required on a company’s operating assets

residual income

10

is after tax operating income minus the dollar cost of capital employed.

economic value added (EVA)

11

is the price charged for a component by the selling division to the buying division of the same company.

transfer price