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Flashcards in Notes 2 Deck (16):
1

Inventory Conversion Period

Average Inventory /
COGS per day

2

Receivables Collection Period
(aka Days Sales Outstanding)

Average Receivables /
Credit Sales per day

3

Payables Deferral Period

Average Payables /
Purchases per day

OR

Average Payables /
(COGS / 365)

4

Cash Conversion Cycle

Inventory Conversion Period
+ Receivables Conversion Period
- Payables Deferral Period

5

Difference between
Data Manipulation Language DML
Data Control Language DCL
Data Definition Language DDL

Manipulation = Queries Database (ManQueDa)
Control = Controls Access (CoCoA)
Definition = Controls Tables (DeCoTa)

~ ManQueDa CoCoA DeCoTa ~
~ Imagine an Al Queda Man Servant serving Cocoa to his fellow terrorists hiding out in north Dakota ~

6

Difference between
Absorption Costing
Variable Costing

Fixed Manufacturing Overhead is treated as a product cost and inventoried under Absorption Costing (GAAP)

Whereas Variable Costing books Fixed Manufacturing Overhead as a period cost/expensed (not GAAP)

~ SVAP ~
Sales > Production (& Inventory decreases), then VC > AC
Sales < Production (& Inventory increases), then VC < AC

7

Difference between
Static Budget
Flexible Budget

Static = budgeted costs for budgeted output
Flexible = budgeted costs for actual output

8

Fixed Factory Overhead

Estimated Cost /
Normal Capacity

9

Variable Overhead

Estimated Activity /
Actual Activity

If immaterial, then goes to COGS
if material, then goes to WIP, Finished Goods, COGS

10

Difference between
Freight In
Freight Out

Freight In = Product Cost (Inventory Sost) & is a direct material purchase item

Freight Out = Period Cost (Selling Cost) & is NOT part of inventory

11

Operating Income

Net Sales
- Product Costs
= Gross margin
- Period Cost
= Operating Income

12

High-Low Method

Change in Cost /
Change in Activity

13

Budgeting Flowchart

1. Sales Forecast/Budget

2a. Production Budget
= Direct Materials, Direct Labor, Overhead Budgets
2b. R&D/Design Cost Budget
2c. Selling Expense Budget
2d. Administrative Budget


3. Cash Budget
4. Budgeted Income Statement
5. Budgeted Balance Sheet

14

Cash Budget

Beginning Cash Balance
+ Receipts (aka Collections)
= Cash Available
- Payments (materials, expenses, payroll)
+/- Financing
= Ending Cash Balance

15

Production Budget

Budgeted Sales
+ Desired Ending Finished Goods Inventory
= Total Need
- Beginning FG Inventory
= Units to be produced
* Direct Materials per unit
= Production Needs
+/- Desired DM Ending Inventory
= Total Needs
- Beginning DM Inventory
= DM to be purchased (units)
* Price per unit
= DM purchases in dollars

16

Balanced Scorecard

~FLICk~ the card

Financial
Learning & Growth (Innovation)
Internal Business Process
Customer