Q5 Chp 22

  1. A system of performance measurement that collects information on several key performance indicators within each of four perspectives: customer, internal processes, innovation and learning, and financial.
    Balanced scorecard
  2. Costs that a manager has the power to control or at least strongly influence.
    Controllable costs
  3. A form of pricing transfers between divisions of the same company based on costs to the transferring division; typically used when the transferring division has excess capacity.
    Cost-based transfer pricing
  4. Department that incurs costs but generates no revenues; common example is the accounting or legal department.
    Cost center
  5. Accounting system that provides information useful in evaluating the profitability or cost effectiveness of a department.
    Departmental accounting system
  6. Amount by which a department's revenues exceed its direct expenses.
    Departmental contribution to overhead
  7. Expenses traced to a specific department (object) that are incurred for the sole benefit of that department.
    Direct expenses
  8. Minimum acceptable rate of return (set by management) for an investment.
    Hurdle rate
  9. Expenses incurred for the joint benefit of more than one department (or cost object).
    Indirect expenses
  10. Center of which a manager is responsible for revenues, costs, and asset investments.
    Investment center
  11. The net income an investment center earns above a target return on average invested assets.
    Investment center residual income
  12. Center net income divided by average total assets for the center.
    Investment center return on total assets
  13. The efficiency with which a company generates sales from its available assets; computed as sales divided by average invested assets.
    Investment turnover
  14. Cost incurred to produce or purchase two or more products at the same time.
    Joint cost
  15. The market price of a good or service being transferred between divisions within a company; typically used when the transferring division does not have excess capacity.
    Market-based transfer price
  16. A price, determined by negotiation between division managers, to record transfers between divisions; typically lies between the variable cost and the market price of the item transferred.
    Negotiated transfer price
  17. Business unit that incurs costs and generates revenues.
    Profit center
  18. Ratio of a company's net income to its net sales; the percent of income in each dollar of revenue; also called net profit margin.
    Profit margin
  19. Report of expected costs and expenses under a manager's control.
    Responsibility accounting budget
  20. Responsibility report that compares actual costs and expenses for a department with budgeted amounts.
    Responsibility accounting performance report
  21. System that provides information that management can use to evaluate the performance of a department's manager.
    Responsibility accounting system
  22. The price used to record transfers of goods or services between divisions in the same company.
    Transfer price
  23. Costs that a manager does not have the power to determine or strongly influence.
    Uncontrollable costs
Card Set
Q5 Chp 22
Q5 Chp 22