Cost Accounting – 12th Edition
Ch 13 Terms
Balance scorecard – A framework for implementing strategy by translating an organization’s mission and strategy into a set of performance measures.
Cost leadership – Organizations ability to achieve lower costs relative to competitors through productivity and efficiency improvements, elimination of waste, and tight cost control.
Discretionary costs – Arise from periodic (usually annual) decisions regarding the maximum amount to be incurred and have no measurable cause-and-effect relationship between output and resources used.
Downsizing – An integrated approach of configuring processes, products, and people to match costs to the activities that need to be performed to operate effectively and efficiently in the present and future. Also called rightsizing.
Engineering costs – Costs that result from a cause-and-effect relationship between the cost driver, output, and the (direct or indirect) resources used to produce that output.
Partial productivity – Measures the quantity of output produced divided by the quantity of an individual input used.
Price-recovery component – Change in operating income attributable solely to changes in prices of inputs and outputs between one period and the next.
Product differentiation- An organization’s ability to offer products or services perceived by its customers to be superior and unique relative to the products and services of its competitors.
Productivity – Measures the relationship between actual inputs used (both quantities and costs) and actual outputs produced; the lower the inputs for a given quantity of outputs or the higher the outputs for a given quantity of inputs, the higher the productivity.
Productivity component – Change in costs attributable to a change in the quantity of inputs used in the current period relative to the quantity of inputs that would have been used in the prior period to produce the quantity of current period output.
Reengineering- The fundamental rethinking and redesign of business processes to achieve improvements in critical measures of performance, such as cost, quality, service, speed, and customer satisfaction.
Right sizing – see downsizing.
Total factor productivity – The ratio of the quantity of output produced to the costs of all inputs used, based on current period prices.
Unused capacity– The amount of productive capacity available over and above the productive capacity employed to meet consumer demand in the current period.