Unit 3 Management Decisions Based on Accounting Information

Question 1

(ABC) A costing system for situations where overhead is high and/or a variety of products are produced; costs are traced to activities and then activities are allocated to production

Answer 1

Activity-Based Costing

Question 2

(B2B) A system that enables data interchange between companies; sometimes sufficiently robust to permit automatic inventory replenishment, etc.

Answer 2

Business to Business

Question 3

A planning tool that outlines the financial plans for an organization; there are various types of budgets – operating, capital, and financial

Answer 3

Budget

Question 4

(CFM) a professional designation of competency in the field of financial management that is issued by the Institute of Management Accountants

Answer 4

Certified Financial Manager

Question 5

(CGMA) sponsors a designation that distinguishes professionals who have advanced proficiency in finance, operations, strategy and management

Answer 5

Chartered Global Management Accountant

Question 6

(CMA) a professional designation of competency in the field of management accounting that is issued by the Institute of Management Accountants

Answer 6

Certified Management Accountant

Question 7

The primary person responsible for the cost and managerial accounting functions

Answer 7

Controller

Question 8

Cost components needed to change raw materials to finished goods, specifically direct labor and manufacturing overhead

Answer 8

Conversion Cost

Question 9

The process by which an organization’s cost is collected, assigned, and interpreted

Answer 9

Cost Accounting

Question 10

The amount of cost attributable to goods reaching the end of production; beginning work in process (wip) + (direct materials, direct labor, manufacturing overhead) - ending wip

Answer 10

Cost of Goods Manufactured

Question 11

Gross wages paid to those who physically and directly work on the goods being produced

Answer 11

Direct Labor

Question 12

The costs of all materials that are an integral part of a finished product and that have a physical presence that is readily traced to that finished product

Answer 12

Direct Material

Question 13

(ERP) Comprehensive database software that tracks an almost endless array of business and accounting data

Answer 13

Enterprise Resource Packages

Question 14

Finished goods represent the cost of completed products awaiting sale to a customer

Answer 14

Finished Goods

Question 15

(IMA) a professional association for management accountants that sponsors the CMA and CFM designations

Answer 15

Institute of Management Accountants

Question 16

Product costs that attach to inventory

Answer 16

Inventoriable Cost

Question 17

A costing approach whereby actual labor and material is tracked for each job or product

Answer 17

Job Costing Method

Question 18

(M2M) enables connected devices to communicate with each other

Answer 18

Machine to Machine

Question 19

All costs of manufacturing other than direct materials and direct labor (also called factory overhead)

Answer 19

Manufacturing Overhead

Question 20

A cost not attributable to the acquisition or manufacture of inventory; expensed as incurred

Answer 20

Period Cost

Question 21

Product costs that are direct in nature; direct materials and direct labor

Answer 21

Prime Cost

Question 22

A product costing method particularly well suited to situations where production occurs in a continuous process; costs are pooled and assigned to aggregate output

Answer 22

Process Costing Methods

Question 23

Costs that attach to a product; the summation of direct materials, direct labor, and factory overhead

Answer 23

Product Cost

Question 24

The components that will be used in manufacturing units that are not yet started – also known as direct materials

Answer 24

Raw Materials

Question 25

(RFID) Micro processes embedded in inventory that emit radio frequency signals that enable a computer to automatically track inventory

Answer 25

Radio Frequency Identification

Question 26

A system for evaluating elements that are important to the organization and under the control of an employee holding that position

Answer 26

Scorecards (Balanced)

Question 27

Selling, general, and administrative costs; the period costs of the business

Answer 27

SG&A

Question 28

Benchmarks against which actual productive activity is compared

Answer 28

Standards

Question 29

Development without depletion of natural resources or negative effects on the environment

Answer 29

Sustainability

Question 30

(TOC) Efficiency is improved by seeking out and eliminating constraints within the organization

Answer 30

Theory Of Constraints

Question 31

(TQM) A process for continuous improvement by focusing on customer service and systematic problem solving via teams made up of front-line employees

Answer 31

Total Quality Management

Question 32

Deviations from the norm that may provide warning signs of situations requiring corrective action by managers

Answer 32

Variances

Question 33

Goods that are in production but not yet complete; an accumulation of monies spent on direct material, direct labor, and applied manufacturing overhead

Answer 33

Work In Process