Term
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Definition
| issues and info about which we have doubt |
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Term
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Definition
| preconceived notions adopted without careful thought |
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Term
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Definition
| the core purpose and ideaology of the organization, which guides the organization's overall direction and approaches toward its various stakeholders groups |
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Term
| organizational core competencies |
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Definition
| the organization's strengths relative to competitors |
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Term
| organizational strategies |
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Definition
| the tactics that managers use to take advantage of core competenncies while working toward the organizational vision |
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Term
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Definition
| the various actions taken and results achieved over a period of time |
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Term
| strategic cost management |
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Definition
| simultaneous focus on reducing costs and strenthening an organization's strategic position |
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Term
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Definition
| a formal approach used to help organizations translate their vision into objectives that can be measured and monitored using both financial and nonfinancial performance measures |
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Term
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Definition
| hleps the decison maker evaluate and choose among alternative courses of action |
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Term
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Definition
| does not vary with the action taken and simply does not help the decision maker evaluate the alternatives |
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Term
| relevant/incremental cash flows |
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Definition
| cash flows that occur under one course of action or decision alternative, but not under antoher |
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Term
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Definition
| cash flows that are forgone if the course of action of decision alternative is not taken |
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Term
| irrelevant/unavoidable cash flows |
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Definition
| cash flows that occur regardless of which course of action ofr decision alternative is chosen |
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Term
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Definition
| no single "correct" answer |
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Term
| (foundation) knowing (1) identifying (2)exploring (3) prioritizing (4) envisioning |
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Definition
| Steps for better thinking |
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Term
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Definition
| a thing or activity for which we measure cost |
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Term
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Definition
| easily traced back to individual cost objects because of clear cause-and-effect relationship generally exists between the cost object and the cost |
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Term
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Definition
| not easily traced to individual cost objects because often these costs relate to more than one cost object |
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Term
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Definition
| all production costs except direct materials and direct labor are often combined into this type of costs |
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Term
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Definition
| the benefits we forego when we choose one alternative over the next best alternative |
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Term
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Definition
| expenditures made in the past that shouldn't be considered relevant to decision making |
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Term
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Definition
| the variation in costs relative to the variation in an organization's activities |
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Term
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Definition
| costs that change proportionately with changes in activity levels |
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Term
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Definition
| do not vary much with small changes in activity levels such as production , sales, and services provided |
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Term
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Definition
| costs that are partially fixed, and partially variable |
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Term
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Definition
| a span of activity for a given cost object where total fixed costs remain constant and variable costs per unit of activity remain constant. |
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Term
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Definition
| the incremental cost of an activity , such as producing a unit of goods or services |
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Term
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Definition
| an alegebraic representation of the total cost of a cost object over a relevant range of activity |
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Term
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Definition
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Term
| piecewise linear cost function |
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Definition
| when the slope of a variable cost function changes at some point but remains linear after the change |
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Term
| stepwise linear cost function |
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Definition
| when a fixed cost function changes at some point but remains constant after the change |
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Term
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Definition
| some input or activity that causes changes in a total cost for a cost object |
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Term
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Definition
| costs that reflect periodic decisions about the maximum amount that will be spend on costs for activities such as advertising, exec travel, or R&D |
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Term
| engineered estimate of cost |
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Definition
| when each activity is analyzed according to the amount of labor time, materials, and other resources used and then costs are assigned to those measurements |
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Term
| analysis at the account level |
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Definition
| a technique in which someone reviews the pattern of a cost over time in the accounting system and use our knowledge of operations to classify the cost as variable, fixed, or mixed |
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Term
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Definition
| uses any two sets of data points for cost and a cost driver to algebraically calcualte a mixed cost function |
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Term
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Definition
| a specific application of the two point method using the highest and lowest date points of the cost driver |
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Term
| simple regression alalysis |
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Definition
| develops a cost function by calculating values for the statistical relationship between atotal cost and a single cost driver |
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Term
| multiple regression analysis |
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Definition
| develops a cost function by calculating values for the statistical relationship between total cost and two or more cost drivers |
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Term
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Definition
| a technique that examines changes in profits in response to changes in sales volumes, costs, and prices. |
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Term
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Definition
| the total revenue minus total variable costs |
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Term
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Definition
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Term
| contribution margin ratio |
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Definition
| the percent by which the sellin gprice per unit exceeds the variable cost per unit |
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Term
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Definition
| Contribution margin ratio equation |
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Term
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Definition
| the proportion of different products of services that an organization sells |
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Term
| breakeven quatity=(F+$0)/CM |
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Definition
| breakeven poin quantity equation |
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Term
| breakeven revenue=(F+$0)/CMR |
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Definition
| breakeven point in revenue |
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Term
| pretax profit*(1-tax rate) |
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Definition
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Term
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Definition
| the excess of an organization's expected future sales above the breakeven point |
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Term
| margin of safety in units= actual or estimated units of activity-breakeven point units |
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Definition
| margin of safety equation units |
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Term
| margin of safety percentage |
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Definition
| the margin of safety divided by actual or estimated sales |
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Term
| degree of operating leverage |
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Definition
| the extent to which the cost function is made up of fixed costs. so businesses with high operating leverag eincur more risk of loss when sales decline |
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Term
degree of operating leverage in terms of CM=
(P-V)*Q/Profit |
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Definition
| degree of operating leverage in terms of CM |
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Term
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Definition
| degree of operating leverage in terms of FC |
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Term
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Definition
| the level of activity at which equal cost or profit occurs across multiple alternatives |
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Term
| general rule for special ordering |
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Definition
| we want to be as well off after accepting the order as we were before we accepted it |
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Term
| general rule for keep or drop decisions |
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Definition
| we discontinue a product, service, or business segments when its total CM does not cover avoidable fc |
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Term
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Definition
| the practice of finding outside vendors to supply products and services |
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Term
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Definition
| the practice of providing the good or service from internal resources |
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Term
| general rule for make or buy decisions |
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Definition
| to choose the option with the lowest relevant cost |
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Term
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Definition
| when limits in capacity, materials or labor restrict an organization's ability to provide enough products to satisfy demand |
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Term
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Definition
| any process, part, or machine that limits overall capacity |
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Term
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Definition
| a mathematical technique that maximizes a linear objective funtion subject to linear constraints |
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Term
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Definition
| a resource that limits production, such as number of hours available for inspection |
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Term
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Definition
| resources that do not limit production and could be used if no other contraints limit production |
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