Term
| Responsibility accounting |
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Definition
| a system that measures the results of each responsibility center and compares those results with some measure of expected or budgeted outcome. |
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Term
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Definition
| responsibility center where manager is responsible for revenues, costs, and investments |
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Term
| profit center is responsible for |
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Definition
| delivering a quality product or service at reasonable but minimal cost AND decisions regarding revenue generation |
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Term
| Decentralization benefits |
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Definition
| more timely response, focus central management, training and evaluation and motivation of segment managers |
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Definition
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Term
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Definition
| cost efficiency,discourages excessive investment in operating assets, encourages managers to pay careful attention to the relationships among sales, expenses, and investment |
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Term
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Definition
| After-tax operating income - (Weighted average cost of capital * Total capital employed) |
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Term
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Definition
| manager operating in interest of shareholders, manager rewards tied to shareholder results, and incentive plan to have managers goals the same as shareholders. |
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Term
| What are the two additional perspectives that are added to the activity-based approach to achieve strategic-based responsibility |
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Definition
| a customer perspective and a learning and growth perspective |
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Term
| Continuous improvement accomplished by |
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Definition
| linking initiatives to strategy and mission |
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Term
| Advantages of strategic based responsibility accounting |
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Definition
| Change efforts are directed by the mission and strategy,It includes perspectives that serve as a source of competitive advantage. |
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Term
| Business strategy concerns |
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Definition
| identifying critical internal and business processes,choosing market and customer segments, selecting individual and organizational properties required. |
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Term
| Measures for asset utilization |
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Definition
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Term
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Definition
| links the causal factors in the proposed strategy creating a testable strategy |
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Term
| Double-loop feedback occurs under what conditions |
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Definition
| when managers receive information about the effectiveness of the controls and the effectiveness of the implementation |
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Term
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Definition
| resources allocated and incentives structured to support strategy, Employees share ownership of objectives, measures, targets, and initiatives |
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Term
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Definition
| responsibility center responsible for revenues and cost |
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Term
| Decentralized decision making |
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Definition
| allows managers at lower levels to make and implement key decisions |
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Term
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Definition
| practice of delegating or decentralizing decision making authority |
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Term
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Definition
=operating income/average operating assets
=operating income margin*operating asset turnnover |
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Term
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Definition
| = operating income/ sales |
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Term
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Definition
| = sales/ average operating assets |
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Term
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Definition
| emphasis on short-run results at the expense of the long-run. |
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Definition
| = OI - (minimum rate of return * operating assets) |
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Term
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Definition
| prices charged for goods produced by one division and transferred to another |
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Term
| elements of responsibility accounting |
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Definition
| assign responsibility, performance measures and benchmarks, evaluate performance, assign rewards. |
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Term
| strategic-based responsibility accounting system |
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Definition
| translates strategy of organization into operational objectives and measures |
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Term
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Definition
| identifies objectives and measures for financial, customer, process, and learning and growth perspective. |
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Term
| Elements of Activity-based Responsibility |
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Definition
| no tie to strategy, systemwide efficiency, team accountability, financial perpective, process perspective. |
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Definition
| outcome measures from past efforts. ex.) customer profitability. |
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Term
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Definition
| factors that drive future performance ex.) employee training hours |
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Term
| ABC performance evaluation |
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Definition
| time reductions, quality improvement, cost reduction, trend measurement |
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Term
| Strategic-based performance evaluation |
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Definition
| time reductions, quaility improvement, cost reductions, trend measurement, expanded set of metrics, targets in all 4 perspectives |
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Term
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Definition
| targets that if achieved, transform organization in 3 to 5 years. |
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Term
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Definition
| increase market share, customer retention, customer acquisition, satisfaction, profitability. |
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Term
| internal business process perspective |
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Definition
| processes needed to provide customer and owner value. |
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Term
| Components of process value chain |
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Definition
| innovation process, operations process, postsales process. |
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Term
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Definition
| length of time it takes to produce one unit of out put |
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Term
| Manufacturing Cycle Efficiency |
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Definition
| Process time/(process time+move time+inspection time+wait time+non value time) |
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Term
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Definition
| emphasize effectiveness of implementation. |
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Term
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Definition
| choosing among alternatives with immediate end view |
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Term
| 5 steps of tactical decision making process |
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Definition
| 1.recognize and define problem 2. id alternatives and eliminate non feasible ones 3. id predicted costs and benefits and eliminate ones not relevant 4. compare relevant costs 5. select alternative with greatest benefit |
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Term
| Relevant costs (revenues) |
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Definition
| future costs (revenues) that differ across alternatives. |
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Term
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Definition
| cost incurred in the past |
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Term
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Definition
| focus on whether a specially priced order should be specially priced order should be accepted or rejected |
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Term
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Definition
| assigns manufacturing costs, direct materials, direct labor, variable overhead, and fixed overhead to each unit of product. |
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Term
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Definition
| =(actual price-expected price)*quantity |
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Term
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Definition
| = (act volume- expect volume) * expect price |
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Term
| contribution margin variance |
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Definition
| = actual CM - budgeted CM |
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