Cost Concepts in Management Accounting

<p>All manufacturing overhead costs, both fixed and variable (D)</p> Signup and view all the answers

<p>Variance Analysis (C)</p> Signup and view all the answers

<p>The relationships among costs, volume, and profit (B)</p> Signup and view all the answers

<p>To set pre-determined cost targets (B)</p> Signup and view all the answers

<p>Investment in stocks (A)</p> Signup and view all the answers

<p>Cost (B)</p> Signup and view all the answers

<p>Direct Costs (C)</p> Signup and view all the answers

<p>Fixed Costs (C)</p> Signup and view all the answers

<p>Product Costs (C)</p> Signup and view all the answers

<p>Variable Costs (B)</p> Signup and view all the answers

<p>Opportunity Cost (B)</p> Signup and view all the answers

<p>Mixed Costs (C)</p> Signup and view all the answers

<p>Job Costing (D)</p> Signup and view all the answers

<p>To assign accountability to managers for specific business unit performance (B)</p> Signup and view all the answers

<p>Return on Investment (ROI) (C)</p> Signup and view all the answers

<p>Profit exceeding a required minimum return on investment (B)</p> Signup and view all the answers

<p>To measure and track specific metrics of unit performance (A)</p> Signup and view all the answers

<p>To identify and analyze differences between actual and budgeted results (C)</p> Signup and view all the answers

<p>Investment Centre (B)</p> Signup and view all the answers

<p>Cost Control (A)</p> Signup and view all the answers

<p>Revenue Projections (C)</p> Signup and view all the answers

<p>When total revenues equal total costs (C)</p> Signup and view all the answers

<p>CVP Analysis (A)</p> Signup and view all the answers

<p>Controlling costs, revenues, and investments (D)</p> Signup and view all the answers

<p>Profitability Ratios (D)</p> Signup and view all the answers

<p>Generating expected ROI or residual income (B)</p> Signup and view all the answers

The monetary value of resources used in production.

Any item for which a cost is measured or tracked, like a product, service, or department.

Costs directly traceable to a specific cost object, like materials used in a product.

Costs that are indirectly related to a cost object, like general factory overhead.

Costs that change proportionally with the level of activity, like raw materials needed for each unit produced.

Costs that remain constant within a specific activity range, like rent, regardless of production levels.

Costs associated with producing goods, like materials, labor, and overhead.

Costs incurred in a period, not directly related to production, like administrative expenses.

Identifying factors that cause or influence costs. Helps understand cost behavior and manage cost effectively.

Assigning indirect costs to specific products or services. Necessary when costs cannot be directly traced.

A costing method that includes all manufacturing overhead costs (fixed and variable) in the cost of the product.

An accounting method focused on activities that drive overhead costs, assigning costs more accurately.

Establishing a framework to manage costs, monitor performance, and take corrective actions.

Analyzing the relationships between costs, volume, and profit to make informed business decisions.

Sales revenue minus variable costs. It's the amount of money available to cover fixed costs and generate profit.

The point at which total revenue equals total costs. Neither a profit nor a loss is made.

A system that tracks and evaluates the performance of various business units and their managers, using metrics like ROI and residual income.

A key performance indicator (KPI) used to assess the profitability of investments. It calculates the return generated by an investment relative to its cost.

A measure of the profitability of an investment center that considers a targeted minimum return. It shows the profit exceeding the required return on the investment.

Specific metrics used to measure and track performance across different areas of a business, such as revenue growth, customer satisfaction, and efficiency.

A process of comparing actual performance results with planned or budgeted results. It helps identify variances and understand their causes for taking corrective actions.

A business unit where managers are responsible for both revenue and expenses, as well as controlling investments in assets. They are judged based on how effectively they use these resources to generate profits.

A business unit where managers are only responsible for controlling costs. They don't generate revenue or make investment decisions.

A business unit where managers are primarily responsible for generating revenue. They don't control costs or investments.

A budgeting process where managers set cost targets, analyze variances, and take corrective actions to control costs.

A budgeting process that focuses on projecting revenue and sales forecasts. Managers are accountable for achieving these targets.

A budgeting process that involves setting both revenue and expense targets, as well as goals for the return on investment (ROI). Managers must ensure the investment generates the desired profitability.