Session 1 and 2

Question 1

Define ‘lean production’/just in time

Answer 1

a management approach where a business produces units only in response to customer orders

Question 2

enterprise risk management

Answer 2

a process used by a company to proactively identify and manage foreseeable risks

Question 3

Define corporate social responsibility

Answer 3

considering the needs of all stakeholders when making decisions

Question 4

define cognitive bias

Answer 4

a distorted thought process that can adversely affect planning and decision making

Question 5

3 categories of manufacturing costs

Answer 5

Direct materials Direct labour manufacturing overhead

Question 6

Define direct materials

Answer 6

materials that can be physically traced to a product

Question 7

define direct labour

Answer 7

labour costs that can b easily traced to individual units of a product

Question 8

define manufacturing overhead

Answer 8

all costs of manufacturing that are not direct materials or direct labour

Question 9

administrative costs

Answer 9

costs associated with the general management of an organization

Question 10

product costs

Answer 10

all costs involved in acquiring or making a product (iventoriable or manufacturing costs)

Question 11

period costs

Answer 11

all costs not included in product costs.

Question 12

2 types of period costs

Answer 12

marketing costs, admin costs

Question 13

relevant range

Answer 13

the range in which fixed and variable cost assumptions are valid

Question 14

cost object

Answer 14

any unit of analysis for which cost data is desired

Question 15

direct cost

Answer 15

can be easily traced to a cost object

Question 16

Describe a schedule of CGM

Answer 16

Question 17

Cost structure

Answer 17

portionn of fixed, variable, and mixed costs found at a organizaion

Question 18

true variable costs

Answer 18

varies in driect proporion to the level of production activity

Question 19

step-variable cost

Answer 19

a cost that is obtainable only in large amounts and increases and decreases only in responce to large changes in activity

Question 20

curvilinear costs

Answer 20

costs that show a curved relationship to activity

Question 21

cotribution margin

Answer 21

the amount left on a income statement after variable expenses have been deducted

Question 22

commited vs discretionaly fixed costs

Answer 22

discretionary is normally 1 year range

Question 23

What is CVP

Answer 23

Cost-volume-profit analysis. Shows the relationship between cost, volume, and profit

Question 24

CVP focusus on how costs are affected by what 5 elements

Answer 24

1) Prices of products
2) volume or level of activity
3) per unit variable cost
4) total fixed cost
5) mix of products sold

Question 25

break even point

Answer 25

the level of sales at which profet is zero

Question 26

CM Ratio

Answer 26

CM/Sales

Question 27

variable expense ration

Answer 27

ve/sALES

Question 28

CM Ratio

Answer 28

CM/Sales, or 1-Variable expense ratio

Question 29

operating incomee formula

Answer 29

unit cm(q)-fixed

Question 30

incremental analysis

Answer 30

shows how revenue, cost, and volume change as a result of a decision

Question 31

break even analysis

Answer 31

a aspect of CVP that answers questions such as how far sales can drop before we lose money

Question 32

break even point in units sold

Answer 32

fixed expense/unit contribution margin

Question 34

margin of safety

Answer 34

the excess of budgeted or actual sales minus the break even point

Question 35

operating leverage

Answer 35

how sensitive operating income is to a change in sales

Question 36

degree of operating ;leverage formula

Answer 36

cm/operating income

Question 37

formula for the relationship change in operating income

Answer 37

degree of operating leverage x %change in sales

Question 39

how do I find the indifference point

Answer 39

divide the difference in fixed costs but the difference in CM of the 2 alternatives

Question 41

margin of safety percentage

Answer 41

margin of safety in dollars/total sales

Question 42

how to calculate dollar sales required for target profit

Answer 42

(fixed expense+target profit)/CM ratio

Question 44

after tax target profit in units sold

Answer 44

fixed expense+ target profit/1-tax rate

Question 45

absorbtion costing (full costing)

Answer 45

all unit vosts, fixed and variable, are assigned to units of product

Question 46

process costing

Answer 46

unit product cost=total cost for a period of time/total units produced

Question 47

allocation

Question 48

predetermined overhead rate

Answer 48

overhead rate for a particualr job= predetermined overhead rate X actual direct-labor hours