Term
| What is the equation used in finding the BUDGET PRODUCTION? |
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Definition
Sales units - Beginning + Ending = PRODUCTION
*NOTE: Do this for all the months. Last mo.'s ending is next mo.'s beginning |
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Term
| What is the first thing you calculate in the Order of Operational Budgets? |
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Definition
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Term
| Define ZERO-BASE BUDGETING. |
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Definition
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Term
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Definition
| Initial budget is set at a minimal level and then items are added |
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Term
| Define BUDGETING PROCESS. |
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Definition
| should eliminate non-value added costs |
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Term
| What are the five purposes of a budget? |
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Definition
-Plan
-Communicate
-Allocate
-as a Benchmark
-Evaluate manager performance |
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Term
| What is the equation used to find the SEGMENT MARGIN? |
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Definition
| Sales - Variable Costs = Seg. Contribution Margin - Fixed controllable = Margin Controllable - Fixed Controllable by others (other fixed) =SEGMENT MARGIN |
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Term
| What profit level should a manager be evaluated on? |
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Definition
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Term
| At what profit level should a division be measured as an investment center? |
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Definition
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Term
| Define PERFORMANCE REPORT. |
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Definition
| the budgeted and actual amounts of a responsibility center's key financial results. |
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Term
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Definition
| The process of assigning the costs in a cost pool to the cost objectives |
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Term
| Why are budgeted amounts of allocation bases (instead of actual amounts) preferable? |
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Definition
| Because budgeted amounts are used as allocation bases AND the use of actual amounts could cause fluctuations in the prices charged for a company's products |
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Term
| What are three aspects of a customer profitability analysis? |
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Definition
-Analyzing customers on profit generated work and activities
-Cater to your more profitable customers
-Reduce handling costs of dealing with less profitable customers |
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Term
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Definition
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Term
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Definition
| costs of finding defects (inspections) |
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Term
| Define Internal failure costs |
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Definition
| The cost of defects BEFORE they reach the customer. |
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Term
| Define External failure costs. |
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Definition
| Product defects AFTER reaching the customer. |
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Term
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Definition
| Manager only controls cost |
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Term
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Definition
| Manager only controls revenues. |
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Term
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Definition
| Manager controls both revenues and costs. |
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Term
| Define INVESTMENT CENTER. |
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Definition
| Manager controls costs, revenue, and investment. |
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