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BUSI 601 FINAL EXAM STUDY GUIDE questions well answered to pass
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BUSI 601 FINAL EXAM STUDY GUIDEBalance Scorecard (BSC) - correct answer ✔✔An accounting report that includes the firm's critical
success factors in four areas: (1) financial performance, (2) customer satisfaction, (3) internal processes,
and (4) learning and growth.
Strategy Map - correct answer ✔✔A graphical representation of the organization's value proposition;
used to depict the series of causes and effects embodied in the various perspectives of an organization's
balanced scorecard
Activity-based costing (ABC) - correct answer ✔✔A costing approach that assigns resource costs to cost
objects based on activities performed for the cost objects
Volume Based Costing - correct answer ✔✔(also called traditional costing) is a product costing system
when an entity allocates factory overhead costs to a single cost pool (e.g., factory overhead) and then
uses volume-based cost drivers to allocate factory overhead costs to individual products or services. The
entity uses volume-based cost drivers that depend on the number of units manufactured. Cost bases (or
drivers) often used include labor hours, machine hours and labor costs.
Customer Profitability Analysis (CPA) - correct answer ✔✔Identifies customer service activities, cost
drivers, and the profitability of each individual- customer or customer group.
Target Costing - correct answer ✔✔The desired cost for a product as determined on the basis of a given
competitive price, so the product will earn a desired profit.
Break-Even Point - correct answer ✔✔The point at which total revenues equal total costs so that
operating profit is zero.
Master Budget
o Types of budgets
o Budgetary slack - correct answer ✔✔Budgeting:
, The process of preparing one or more budgets.
Budgetary slack:
The difference between budgeted performance and expected performance; a "cushion" managers
intentionally build into budgets to help ensure success in meeting the budget.
Cost Estimation Methods - correct answer ✔✔The development of a well-defined relationship between
a cost object and its cost drivers for the purpose of predicting the cost.
Benchmarking - correct answer ✔✔A process by which a firm identifies its critical success factors, studies
the best practices of other firms (or other business units within a firm) for achieving these critical
success factors, and then implements improvements in the firm's processes to match or beat the
performance of those competitors.
Theory of Constraints (TOC) - correct answer ✔✔An analysis of operations that improves profitability
and cycle time by identifying the bottleneck in the operation and determining the most profitable
product mix given the bottleneck.
Continuous Improvement - correct answer ✔✔A standard that gets progressively tighter over time.
Flow of costs from Raw Materials to Work in Process to Finished Goods to Cost of Goods Sold - correct
answer ✔✔The flow of costs then moves to work-in-process inventory, where labor, machining, and
overhead costs are added to the cost of the raw materials. Once the production process is complete, the
costs move to the finished goods inventory classification, where the goods are stored prior to sale.
Make or Buy Decisions - correct answer ✔✔Make-or-buy decisions involve the assessment of whether
an organization should continue manufacturing a product or service 'in-house', or if it should just buy
those from an outside supplier.
Performance Measurement - correct answer ✔✔A process that identifies and fathers information about
the work performed and the results achieved by an individual, activity, process, or organizational unit as
compared to preestablished criteria.
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