| activity accounting |
The collection of financial or operational performance
information about significant activities in an enterprise.
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| activity-based costing |
A two-stage procedure used to assign overhead costs to
products or services produced. In the first stage, significant activities
are identified, and overhead costs are assigned to activity cost pools in
accordance with the way resources are consumed by the activities. In the
second stage, the overhead costs are allocated from each activity cost pool
to each product line in proportion to the amount of the cost driver consumed
by the product line.
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| activity-based management (ABM) |
Using an activity-based costing system to improve the
operations of an organization
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| attention-directing function |
The function of managerial-accounting information in
pointing out to managers issues that need their attention.
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| balanced scorecard |
A model of business performance evaluation that balances
measures of financial performance, internal operations, innovation and
learning, and customer satisfaction.
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| Certified Management Accountant (CMA) |
An accountant who has earned professional certification in
managerial accounting.
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| chief financial officer (CFO) |
An organization's top managerial and financial accountant.
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| continuous improvement |
The constant effort to eliminate waste, reduce response
time, simplify the design of both products and processes, and improve
quality and customer service.
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| controller (or comptroller) |
The top managerial and financial accountant in an
organization. Supervises the accounting department and assists management at
all levels in interpreting and using managerial-accounting information.
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| cost-accounting system |
Part of the basic accounting system that accumulates cost
for use in both managerial and financial accounting.
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| cost driver |
A characteristic of an activity or event that results in
the incurrence of costs by that activity or event.
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| cost management system |
A management planning and controlling system that measures
the cost of significant activities, identifies non-value-added costs, and
identifies activities that will improve organizational performance.
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| empowerment |
The concept of encouraging and authorizing workers to take
the initiative to improve operations, reduce costs, and improve product
quality and customer service.
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| financial accounting |
The use of accounting information for reporting to parties
outside the organization.
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| internal auditor |
An accountant who reviews the accounting procedures,
records, and reports in both the controller's and treasurer's areas of
responsibility.
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| just-in-time (JIT) production system |
A comprehensive inventory and manufacturing control system
in which no materials are purchased and no products are manufactured until
they are needed.
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| line positions |
Positions held by managers who are directly involved in
providing the goods or services that constitute an organization's primary
goals.
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| managerial accounting |
The process of identifying, measuring, analyzing,
interpreting and communicating information in pursuit of an organization's
goals.
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| non-value-added costs |
The costs of activities that can be eliminated without
deterioration of product quality, performance, or perceived value.
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| staff positions |
Positions held by managers who are only indirectly involved
in producing an organization's product or service.
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| strategic cost management |
Overall recognition of the cost relationships among the
activities in the value chain, and the pro-cess of managing those cost
relationships to a firm's advantage.
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| theory of constraints |
A management approach that focuses on identifying and
relaxing the constraints that limit an organization's ability to reach a
higher level of goal attainment.
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| total quality management (TQM) |
A product-quality program in which the objective is
complete elimination of product defects.
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| treasurer |
An accountant in a staff position who is responsible for
managing an organization's relationships with investors and creditors and
maintaining custody of the organization's cash, investments, and other
assets.
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| value chain |
An organization's set of linked, value-creating activities,
ranging from securing basic raw materials and energy to the ultimate
delivery of products and services.
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