Chapter 10 accounting (and extra)

¡Supera tus tareas y exámenes ahora con Quizwiz!

A detailed plan for the future that is usually expressed in formal quantitative terms is ______.

budget

When a manager creates a budget that is too easy to attain, Blank______ occurs.

budgetary slack

example of profit center

company divisions, departments, or products themselves

example of investment center

company with multiple segments or locations

A business segment whose manager has control over cost but has no control over revenue or investments in operating assets

cost center

An organization in which decision-making authority is not confined to a few top executives but rather is spread throughout the organization

decentralized organization

The manager of a(n) __________ center has control over costs, revenue, and investments in operating assets.

investment

A business segment whose manager has control over cost, revenue, and investments in operating assets

investment center

Cash, accounts receivable, inventory, plant and equipment, and all other assets held for operating purposes

operating assets

A business segment whose manager has control over cost and revenue but has no control over investments in operating assets

profit center

Any business segment whose manager has control over costs , revenues , or investments in operating assets

responsibility center

The usual starting point for a master budget is:

sales budget

process time + inspection time + move time + queue time

throughput time

Manufacturing cycle efficiency formula

value added time / throughput time

Delivery Cycle Time Formula

wait time + throughput time

Disadvantages of Decentralization

-duplication of costs -problems achieving goal congruence

Advantages of Decentralization

-frees top management time -improves customer relations -provides training -improves motivation and retention -responses are quicker

Quick to Ship Company has a process time of 2 days and a throughput time of 8 days. The manufacturing cycle efficiency is ______.

0.25 (2/8)

Given budgeted sales of 10,000 units, desired ending inventory of 5,000 units, and beginning inventory of 2,000 units, required production is ______ units.

13,000

Last year sales were $300,000, net operating income was $75,000, and average operating assets were $500,000. If sales next year remain the same as last year and expenses and average operating assets are reduced by 5%, what will be the return on investment next year?

18.2% (300,000) - (225,000 *.95)= 86,250. 86,250 / (500,000 *.95) = 18.2 %

Macey, Inc.'s investment center had average operating assets of $350,000, revenues of $1,050,000 and net operating income of $70,000. Return on investment is Blank______.

20% (70,000 / 350,000)

Macey, Inc.'s investment center had average operating assets of $350,000, revenues of $1,050,000 and net operating income of $70,000. Return on investment is Blank______.

20% = 70,000/ 350,000

The standard price of materials is $3.50 per pound and the standard quantity allowed for actual output is 7,000 pounds. If the actual quantity purchased and used was 6,700 pounds, and the actual price per pound was $3.40, the direct materials price variance is $

670, favorable

An integrated set of performance measures that are derived from and support the organization's strategy

Balanced scorecard

What are the 3 main types of responsibility centers?

Cost, profit, and investment centers

Return on investment equals margin divided by turnover true or false?

False

The throughput time increases when wait time increases when the wait time increases. And the delivery cycle time is unaffected by queue time. True or false?

False

Net operating income is income before what 2 things?

Interest and taxes

Some criticisms of return on investment include

Managers being told in increase ROI isn't always enough, plus they don't always have full control, plus investment opportunities may not always be enough.

In order to fully understand how a manager's decisions can affect ROI, both ___ and ___ should be computed

Margin * Turnover

Return on Investment Formula

Net Operating Income / Average Operating Assets

Margin Formula

Net Operating Income / Sales

Income before interest and income taxes have been deducted

Net operating income

Wait time, move time, inspection time, queue time are what?

Non value added time

Example of balanced scorecard

Offering satisfying things and good customer service but sacrificing other things

Financial measures don't measure what drives....

Organizational performance

Under variable costing, fixed manufacturing overhead is what kind of cost?

Period cost

Budgets are used for what 2 distinct purposes?

Planning and controlling

Under absorption costing, fixed manufacturing overhead is in what kind of costs?

Product cost

Managers in which of the following responsibility centers are held responsible for profits?

Profit and investment center

Residual income formula?

Residual Income = Net Operating Income - (Average Operating Assets * Minimum Required Rate of Return)

Decentralized organizations have what kind of system?

Responsibility accounting system

Increase sales, reduce operating expenses, reduce operating assets, these are ways to increase __________.

Return on investment

Margin * turnover equals

Return on investment

Turnover Formula

Sales divided by average operating assets

Sales revenue equals

Selling price per unit * units sold

What are partial company owners?

Stockholders

The elapsed time from when production is started until finished goods are shipped

Throughput time

Residual income should be higher than zero true or false?

True

The balanced scorecard contains 4 categories of performance measures true or false?

True

nonoperating assets are excluded from investments true or false?

True

Wages and salaries actual results are $106,900. The planning budget is 102,000 is it favorable or unfavorable?

Unfavorable

Process time is a ___________ added __________

Value, time


Conjuntos de estudio relacionados

Civil Rights Movement Extra Info 1954 - 1968

View Set

OEHS Applied Occupational Biostatistics Quiz review 2

View Set

Week 2 Biology- evolution and natural selection

View Set

Adult Health II Musculoskeletal Trauma Chapter 37 PREP U

View Set

Centralized Locations and Tools for Multiple Terminologies: Servers, Services, Databases, and Registries

View Set

11 Countries of Southeast Asia capital Cities

View Set