Shared Flashcard Set

Details

ACG 2071 Final Exam
@ UCF with Kazeem Akinyele
51
Accounting
Undergraduate 2
08/04/2016

Additional Accounting Flashcards

 


 

Cards

Term
budgets
Definition
plan or forecast acquisition and uses of resources; they are used in planning, directing, and control activities
Term
master budget
Definition
comprehensive set of all budgets for operations
Term
sales budget
Definition
prepare first as base from which other budgets are generated
Term
production budget (units)
Definition
units needed for sales forecast + desired ending inventory = total units needed - units in beginning inventory = units to produce
Term
purchases (materials) budget
Definition
quantity of DM needed for production + desired DM ending inventory = total quantity of DM needed - DM beginning inventory = quantity of DM to purchase
Term
direct labor budget
Definition
units to be produced x DL hours per unit = total DL hours required x DL cost per hour = total direct labor cost
Term
operating expense budget
Definition
budgets for areas other than manufacturing costs (depreciation may be in this budget, it is a non-cash expense)
Term
cash budget
Definition
beginning cash balance + budgeted cash collections = cash available - budgeted cash payments = ending cash balance before financing
Term
debit/credit card transactions
Definition
must reduce cash collections budget for transaction fees
Term
strategic planning
Definition
long term, 5-10 years
Term
zero-based budgeting
Definition
must justify each dollar included in budget
Term
budget committee
Definition
reviews and approves final budget; should include cross section of managers
Term
budget slack
Definition
managers may overestimate expenses and underestimate revenues in budget numbers
Term
decentralization
Definition
"pushing" down management decisions to lower management levels
Term
responsibility accounting
Definition
managers should be measured based on information and activities they have control over (cost center, revenue center, profit center, and investment center)
Term
cost center
Definition
manager must control costs, uses performance report for comparing actual costs versus budgeted costs
Term
revenue center
Definition
manager must generate sales, uses performance report for comparing actual revenue versus budgeted revenue
Term
profit center
Definition
manager must earn profits through generating sales and controlling costs, uses performance report comparing actual revenue and costs versus budgeted revenue and costs
Term
investment center
Definition
manager must earn profits and manage division's invested capital
Term
control function
Definition
evaluates performance of company (e.g. are the goals of the company being met?)
Term
variance anaylsis
Definition
compares actual results with flexible budget, eliminates variances due to volume differences, must be able to identify variances as either favorable or unfavorable
Term
management by exception
Definition
review items which appear "out of line", normally do not investigate small variances
Term
return on investment (ROI)
Definition
sales margin x capital turnover
sales margin = operating income / sales
capital turnover = sales / total assets
operating income / total assets
Term
sales margin
Definition
operating income/sales, capital turnover = sales/total assets
Term
residual income
Definition
operating income - (target rate of return x total assets)
Term
transfer price
Definition
price that is set on an exchange of a product or service between two segments within the same company
Term
general transfer price rule
Definition
minimum price set = outlay costs + opportunity costs
Term
master budget
Definition
budget does not change with changes in sales volume
Term
flexible budget
Definition
budget does change with changes in sales volume
Term
volume variance
Definition
difference between master budget and a flexible budget at actual output
Term
flexible budget variance
Definition
difference between flexible budget and actual results
Term
balanced scorecard
Definition
integrated set of performance measurements; performance measures include financial, customer related, internal business process, and learning and growth
Term
standard costs
Definition
expected costs for one unit
Term
key variances
Definition
DM price variance, DM quantity variance, DL rate variance, DL efficiency variance, variable OH rate variance, variable OH efficiency variance
Term
DM price variance
Definition
what was paid for material versus a standard
actual quantity purchased x (actual price - standard price)
Term
DM quantity variance
Definition
what was used in material versus a standard
standard price x (actual quantity used - standard quantity)
Term
DL rate variance
Definition
what employees were actually paid versus the standard
actual hours used x (actual rate - standard rate)
Term
DL efficiency variance
Definition
how many hours actually put into work versus standard hours
standard rate x (actual hours - standard hours)
Term
variable OH rate variance
Definition
actual hours x (actual rate - standard rate)
Term
variable OH efficiency variance
Definition
standard rate x (actual hours - standard hours)
Term
fixed OH spending variance
Definition
actual fixed overhead - budgeted fixed overhead
Term
residual income (RI)
Definition
operating income - minimum acceptable income

operating income - (target rate of return x total assets)
Term
financial KPI
Definition
key performance indicator: sales revenue growth, gross margin growth, net operating income growth, ROI, EPS growth
Term
customer KPI
Definition
key performance indicator: customer satisfaction ratings, % of market share, increase in # of repeat customers
Term
internal business KPI
Definition
key performance indicator: # of new products developed, product quality (defect rate), manufacturing cycle time, # of warranty claims, average repair time
Term
learning & growth KPI
Definition
key performance indicator: employee satisfaction, employee turnover, hours of employee training, # of employee suggestions that are implemented
Term
planning
Definition
developing objectives and goals
Term
coordination & commnication
Definition
day to day management decisions
Term
benchmarking
Definition
determining whether objectives and goals are met, comparing actual results to budget
Term
operating budgets
Definition
budgets needed to run the daily operations of the company and may include:
(in order) sales budget, production budget, direct material budget, direct labor budget, manufacturing overhead budget, operating expenses budget, budgeted income statement
Term
financial budgets
Definition
project the collection and payments of cash and may include:
1. capital expenditure budget
2. cash collections, cash payments, and combined cash budget
3. budgeted balance sheet
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