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Definition
| Used for decision making, internal users, future-oriented, no GAAP, very detailed, designed to influence employee behavior |
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| Communicates financial standing to external users, past-oriented, GAAP compliant |
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Approaches used by managers in their decisions to increase the customer's value and to achieve goals
- Reducing Costs
- Revenue planning
- Profit Planning
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Decides what kind of company you wanna be
- Cost Leadership
- Product Differiention
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Term
| Strategic Cost Management |
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Definition
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focuses on cost side within the firms overall strategy
- Identify most important customers.
- Identify substitute products
- Identify our core competency
- Determine whether the organization has enough cash to fund the strategy.
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Definition
- Sequence of business functions in which customer usefulness is added to products or services
- R & D
- Design of Products and Process
- Production
- Marketing
- Distribution
- Customer Service
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Term
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Definition
- Part of the value chain that deals with producing and delivering a product or service
- It is the flow of goods, services, and information from start to finish
- Includes external organizations
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Definition
- Cost and efficiency
- Quality
- Time
- Innovation
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Term
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Definition
selects goals, predicts results, decides how to attain goals, and communicates this to the organization
- 1-4 steps in the decision making process
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Definition
| Takes actions that implement the planning decision, decides how to evaluate performance, and provides feedback (5th step in decision making process) |
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5 step decision making process
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Definition
- Identify the problem
- Obtain information
- Make predictions about the future
- Make decisions by choosing between alternatives
- Implement the decision, evaluate performance, and learn
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Term
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Definition
| Directly responsible for attaining the goals of the organization. Does bulk of the work |
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Definition
| Supports line management with advice and assistance. High management who pulls the strings |
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Definition
Oversees the overall operations of the accounting system
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Definition
| Responsible for the banking, financing, investments, and cash management duties |
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Term
4 standards to professional Ethics
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Definition
- Competence
- Confidentiality
- Integrity
- Objectivity
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Definition
| sacrificed resource to achieve a specific objective |
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Definition
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| anything of interest for which a cost is desired |
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Definition
| a collection of cost data in an organized manner |
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Term
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Definition
- a general term that includes gathering accumulated costs to a cost object. This includes
- Tracing accumulated costs with a direct relationship to the cost object
- Allocating accumulated costs with an indirect relationship to a cost object
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Term
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Definition
| can be conveniently and economically traced to a cost object |
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Term
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Definition
| cant be traced to a cost object, instead these costs are allocated to a cost object in a rational and systematic manner |
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Term
| Factors affecting Direct/Indirect Cost Classification |
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Definition
- Cost Materiality
- Availability of information-gathering technology
- Operational Design
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Definition
| Change in proportion to changes in activity |
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Definition
| Remain unchanged regardless of activity |
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Definition
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Term
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Definition
- change inversely with the level of activity
- As production increases, FC/unit decrease
- As production decreases, FC/unit increase
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Term
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Definition
| variable that casually affects costs of a given time span |
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Definition
| band of normal activity in which there is a specific relationship between the level of activity and a given cost |
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Definition
| Raw materials converted to products |
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Definition
| purchase inventory and then sell tangible products without changing their basic form |
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Definition
| Provides services, do not have inventory costs |
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Definition
| Resources in stock and AFS |
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Definition
| Products started but not yet completed |
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Definition
| products completed and ready for sale |
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Definition
- Product manufacturing costs. Costs are capitalized as assets until they are sold and transferred to CGS
- Direct Materials
- Direct Labor
- Manufacturing Overhead
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Term
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Definition
- Have no future value and are expensed in period incurred
- All costs other than CGS in the I/S
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Definition
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Definition
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Term
| 3 Common Features of Cost accounting and cost management |
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Definition
- Calculating the cost of products, services, and other cost objects
- Obtaining information for planning and control
- Analyzing the relevant information for making decisions
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