Ops Mgmt A - Perf Mgmt and Impact Flashcards Preview

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Flashcards in Ops Mgmt A - Perf Mgmt and Impact Deck (90)
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1

Residual Income (RI) =

NI - (Min. Req Rate x Invested Capital)

2

Return on Investment (ROI) =

NI / Invested Capital

3

Profit Margin =

NI / Sales

4

Capital Employed Turnover Rate =

Sales / Invested Capital

5

ROI also =

Profit Margin x Capital Employed Turnover Rate

6

A mgmt practice involving concentration on areas that deserve attention and placing less attention on areas operating as expected is

mgmt by exception

7

Mgmt by objectives is

a mgmt practice that involves having a manager and subordinate jointly develop objectives and plans

8

Responsibility Accounting is

a method whereby responsibility is identified and related to managers and then managerial performance is monitored and evaluated based on this

*think cost center, profit center, investment center

9

Benchmarking is

identifying the best in class performance or other measure and then comparing the company's performance to that standard

10

Flexible (incremental) budget is

a less detailed budget prepared for several possible levels of production (prospective) or adjusted for the level of production actually achieved (retrospective)

11

Static budget is

a very detailed budget prepared for a single target level of activity and it does not change

12

Favorable variance is

when actual costs are less than the budget

13

Profit Margin on Sales =

Income / Sales

14

Asset Turnover =

Sales / Assets

15

Return on Assets (ROA) =

Income / Assets

16

ROA also =

Profit Margin on Sales x Asset Turnover

17

Incentive compensation programs should be setup to

promote and maintain an inspired and productive work environment

18

Controllable revenue would be included in a performance report for

a profit center

19

Only controllable _______ appear in the cost center performance report

costs

20

A profit center includes

both controllable revenues and controllable costs

21

If you have multiple divisions of a company, you would ________ to find the Residual Income of the company as a whole

calculate the RI for each division and sum

22

A performance measure that may lead a manager of an investment center to forgo investments that could benefit the company as a whole is

ROI

23

Profitability Index (PI) =

PV of CF after initial investment / Initial Investment

24

Economic Value Added (EVA) =

After-tax operating income - [WACC x (Total Assets - Current Liabilities)}

25

In evaluating customer profitability, price discounts would fall into the category of customer

revenue level per unit

26

Discounts are _________ not cost outlays

price adjustments

27

An incentive compensation program will

lead employees toward the goals of the organization

28

An unfavorable materials usage variance would be charged to

the manufacturing dept

29

Unfavorable variance is

a disadvantageous result not in the best interest of the company

30

DM usage variance =

Standard cost x (Std qty - Actual qty)