Chapter 10 Managerial Accounting
Terms
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- balanced scorecard
- an integrated set of performance measures that is derived from and supports the organization's strategy.
- bill of materials
- a listing of the amount of each type of material required to make a unit of product.
- delivery cycle time
- the elapsed time from receipt of a customer order to when the completed goods are shipped.
- ideal standards
- standards that allow for no machine breakdowns or other work interruptions and that require peak efficiency at all times.
- labor efficiency variance
- a measure of the difference between the actual hours taken to complete a task and the standard hours allowed, multiplied by the standard hourly labor rate.
- labor rate variance
- a measure of the difference between the actual hourl labor rate and the standard rate, multiplied by the number of hours worked during the period.
- management by exception
- a system of management in which standards are set for various operating activities, with actual results compared to these standards. any differences that are deemed significant are brought to the attention of managment as "exceptions".
- manufacturing cycle efficiency (MCE)
- process (value added) time as a percentage of throughput time.
- materials price variance
- a measure of the difference between the actual unit price paid for an item and the standard price, multiplied by the quantity purchased.
- materials quantity variance
- a measure of the difference of between the actual quantity of materials used in production and the standard quantity allowed, multiplied by the standard price per unit of materials.
- practical standards
- standards that allow for normal machine downtime and other work interruptions and that can be attained through reasonable, through highly efficient, efforts by the average worker.
- standard cost card
- a detailed listing of the standard amounts of inputs that should go into a unit of product, multiplied by the standard price or rate that has been set for each input.
- standard cost per unit
- the standard cost of a unit of product as shown on the standard cost card; it is computed by multiplying the standard quantity or hours by the standard price or rate for each cost element.
- standard hours allowed
- the time that should have been taken to complete the period's output. it is computed by multiplying the actual number of units produced by the standard hours per unit.
- standard hours per unit
- the amount of labor time that should be required to complete a single unit of product, including allowances for breaks, machine downtime, cleanup, rejects, and other normal inefficiences.
- standard price per unit
- the price that should be paid for a single unit of that material, including allowances for quality, quantity purchased, shipping, recieving, and other such costs, net of any discounts allowed.
- standard quantity allowed
- the amount of materials that should have been used to complete the period's actual output. it is computed by multiplying the actual number of units produced by the standard quantity per unit.
- standard quantity per unit
- the amount of materials that should be required to complete a single unit of product, including allowances for normal waste, spoilage, rejects, and similar inefficiencies.
- standard rate per hour
- the labor rate that should be incurred per hour of labor time, including employment taxes, fringe benefits, and other such labor costs.
- throughput time
- the amount of time required to turn raw materials into completed products.
- variable overhead efficiency variance
- the difference between the actual level of activity allowed, multiplied by the variable part of the predetermined overhead rate.
- variable overhead spending variance
- the difference between the actual variable overhead cost incurred during a period and the standard cost that should have been incurred based on the actual activity of the period.
- variance
- the difference between standard prices and quantities on the one hand and actual prices on the other hand