Term
| • Process of estimating revenues and costs of alternative actions available to decision makers and of comparing these estimates to the status quo |
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| Period of time over which capacity will be unchanged, usually one year |
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| Costs that differ among or between alternatives |
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| VARIABLE costs are ___ when a decision involves possible changes in volume |
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| Costs that were incurred in the past and cannot be changed regardless of decision made |
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t or f
sunk costs can be differential |
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| first two columns showing the total operating profit under status quo and the alternative |
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| column showing the differences of the items; highlights differences between alternatives |
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Term
Describe a product’s cost that includes
A. VARIABLE costs of producing and selling the product
B. share of the organization’s fixed costs |
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Definition
| full cost or full product cost |
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| Sometimes decision makers use these full costs thinking they are variable costs |
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| order that will not affect other sales and is usually a short run occurrence |
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t or f
Fixed costs should NOT bear in the decision to accept special orders or not |
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| approach wherein the accounting department provides costs reports to the marketing department which then adds appropriate markups to determine benchmark or target prices for all products the firm normally sells |
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| Time from initial research and development to the time that support to the customer ends |
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| The term __ conveys the sense of capturing all life-cycle costs associated with a product |
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Definition
| “cradle-to-grave costing” |
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Term
| this budget highlights for managers the importance pf setting prices that will cover costs in all value-chain categories |
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Definition
| product life cycle budget |
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Term
| Is the concept of “price-based costing” instead of “cost-based pricing” |
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Term
| is the estimated price for a product or service that potential customers are willing to pay |
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| is the estimated long run cost of a product or service whole sale enables the company to achieve targeted profit |
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| target profit - target price |
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| Setting selling prices at a low cost with the intent of driving competitors out of the market or creating a barrier to entry for new competitors |
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| Occurs when a company exports its product to consumers in another country at an export price that is below the domestic price |
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| Is the practice of selling identical goods or services to different customer at different prices |
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| Is the practice of setting prices highest when the quantity demanded for the product approaches the physical capacity to produce it |
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| Is the agreement among business competitors to set prices at a particular level |
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| Any decision by a company to acquire goods or services internally or externally |
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| make-it or buy-it decisions |
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| forgone returns from not employing a resource in its best alternative use |
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| If a resource has no beneficial alternative then iya opportunity cost is __ |
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| the practice of using an organization's own personnel or other resources to accomplish a task that was previously outsourced |
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| activities, resources, or policies that limit or bound the attainment of an objective |
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| contribution margin per unit of a particular input with limited availability |
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Definition
| contributio margin per unit of scarce resource |
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Term
| oIt is a management method for dealing with constraints |
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Definition
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| what is the objective of theory of constraints? |
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Definition
| to increase throughput contribution |
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| Focuses on increasing the excess of differential revenue over differential costs when faced with BOTTLENECKS |
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| An operating where the work required to be performed limits production |
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| a bottleneck is a ____ resource |
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| Throughput contribution = __________ |
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Definition
| SALES DOLLARS – DIRECT MITERIALS and OTHER VARIABLE COSTS |
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Term
| are inventories, equipment, buildings and other assets used to generate throughput contribution |
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Term
| are costs other than DM and other variable costs; are incurred to earn throughput contribution they include most salaries, wages, rent, utilities, and depreciation |
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