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WorksheetsSPEC 2: CM MIDTERM
Total questions: 45
Worksheet time: 23mins
an effective engineering toolfor use in design, and applied proactively in cost accounting and management
Life - Cycle Costing
cost includes R&D, Recurring investment and non-recurring investment costs.
Sustaining Cost
Acquisition Cost
Variable Cost
Life Cycle Cost
Includess cheduled and non-scheduled, facility usage and disposal costs.
Acquisition Cost
Sustaining Cost
a similar productor component and adjusts its costs for differences between it and the target product.
Parametric Model
Analogy Model
Engineering Cost Model
Analogy Cost Model
used where there is detailed and accurate capital and operational cost data for the asset under study
Parametric Cost Model
Analogy Model
Parametric Model
Engineering Cost Model
based on predicting a product’s or a component’s cost either in total or for various activities by using several models describing the relationships between costs and some product- or process-related parameters
Parametric Model
Analogy Model
Engineering Model
Engineering Cost Model
Volume-based, Unconventional costing method and Modern cost management systems
Engineering Cost Accounting Model
Cost Accounting Model
Bulk Cost Accounting Model
Advanced Cost Model
umbrella term for all costing methods that rely on the distinction of variable and fixed costs to determine the product costs (standard costing)
cost-volume costing
volume-based costing system
unconventional costing method
attribute based costing
A technique for estimating the total cost of ownership of an asset over its lifetime which assists the decision-makers to make more informed decisions with respect to the acquisition and management of assets.
it follows that the product costs strongly correlate with the production volume
Product -based costing
volume-based costing
volume-based costing system
product-based costing system
a detailed cost-benefit analysis of customer needs aimed at improving effectiveness
JUST-IN-TIME COSTING
FEATURE COSTING
ATTRIBUTE-BASED COSTING
TARGET COSTING
Leads to a more direct reduction of costs and an improvement of performance
FEATURE COSTING
ACTIVITY-BASED COSTING
COST TO PERFORMANCE COSTING SYSTEM
ATTRIBUTE-BASED COSTING
A costing system that is based on the formulations of resources, activities, and cost objects
FUNCTION-BASED COSTING SYSTEM
PERFORMANCE-BASED COSTING SYSTEM
ACTIVITY-BASED COSTING
MANAGEMENT SYSTEMS ACTIVITY-BASED COSTING
Is oriented toward process and time, as measured by the cycle time
JUST-IN-TIME COSTING
PROJECT SCHEDULE COSTING
CYCLE TIME COSTING
TIMESPAN COSTING
A system of profit planning and cost management that is price driven, customer focused, design centered and cross functional
CYCLE TIME COSTING
TARGET COSTING
FUNCTION COSTING
VARIABLE COSTING
types of modern cost management systems
TARGET COSTING
ACTIVITY-BASED COSTING
JUST-IN-TIME COSTING
STRATEGIC COST MANAGEMENT
Types of Cost Accounting Model
VOLUME-BASED COSTING METHOD
UNCONVENTIONAL COSTING METHOD
MODERN COST MANAGEMENT SYSTEMS
VOLUME-BASED COSTING SYSTEMS
Life Cycle Costing Model
COST ACCOUNTING MODEL
ENGINEERING COST MODEL
ANALOGY MODEL
PARAMETRIC MODEL
The value added concept focuses on internal activities, while the value chain focuses on external activities
TARGET-BASED COSTING
ACTIVITY-BASED COSTING
STRATEGIC COST MANAGEMENT
ACTIVITY-BASED COST MANAGEMENT
everything the organization uses to operate, and the measure is cost
COST OBJECTS
ACTIVITIES
RESOURCES
MONEY
costing that Is remarkably close to the product life-cycle concepts
TARGET COSTING
JUST-IN-TIME COSTING
CYCLE TIME COSTING
STRATEGIC COST MANAGEMENT
Uncoventional Costing Methods
VOLUME-BASED COSTING
ATTRIBUTE-BASED COSTING
ACTIVITY-BASED COSTING
FEATURE COSTING
Modern Costing Method
ACTIVITY-BASED COSTING
STRATEGIC COST MANAGEMENT
JUST-IN-TIME COSTING
VOLUMED-BASED COSTING
TARGET COSTING
A methodology that measures the cost and performance of activities, resources, and cost objects.
COST TO PERFORMANCE COSTING
VOLUME-BASED COSTING
PROJECT CYCLE COSTING SYSTEM
ACTIVITY-BASED COSTING
Resources are assigned to activities, and then activities are assigned to cost objects based on their use
UNCONVENTIONAL COSTING SYSTEM
MODERN COSTING SYSTEM
ACTIVITY-BASED COSTING
TARGET COSTING
ACTIVITY-BASED COSTING
RESOURCES
COST OBJECT
ACTIVITIES
TIME
are actually being done in the organization
PRODUCT
COST OBJECTS
RESOURCES
ACTIVITIES
the objects, typically products and customers, for which we want separate cost, revenue, and profit statements.
PRODUCT
SERVICES
COST OBJECT
COST OBJECTS
ACTIVITY-BASED COSTING
Cost objects - Activities - Resources
Cost Objects - General Ledger
Resources - Activities - Cost Objects
cost assignment view, deals with: pricing, product mix, sourcing, product design,setting priorities for improvement efforts
3rd Dimension
4th Dimension
1st Dimension
2nd Dimension
Multiverse
the process view, is used for non-economic performance measurement
5th Dimension
1st Dimension
3rd Dimension
2nd Dimension
This implies that the elapsed time and effort required to perform activities must be reduced
TIME SCHEDULE
TIME CYCLE
ACTIVITY REDUCTION
TIME REDUCTION
removing activities in an organization do not contribute to customer value, responsiveness, or quality (nonvalue-added activities).
ACTIVITY REDUCTION
ACTIVITY ELIMINATION
ACTIVITY SELECTION
applicable when a product or a production process can be designed in several ways, with each alternative carrying its own set of activities and costs
ACTIVITY SELECTION
ACTIVITY ELIMINATION
ACTIVITY ALTERATION
ACTIVITY REDUCTION
provides economies of scale as the designer of a product or process can choose design alternatives that permit products to share activities
ACTIVITY SELECTION
ACTIVITY SHARING
ACTIVITY REDUCTION
ACTIVITY ELIMINATION
should include as a minimum the objectives of the model, its system boundaries, and its perspective
MODEL THE UNCERTAINTY
DEFINE THE SCOPE OF THE MODEL AND THE 1CORRESPONDING COST OBJECTS
IDENTIFY THE RELATIONSHIPS BETWEEN ACTIVITY DRIVERS AND DESIGN CHANGES
CREATE AN ACTIVITY HIERARCHY AND NETWORK
This is done for all the activities and then is summed up to produce the total cost of all the activities, which is theBill of Activities (BOA)
ESTIMATE THE COST OF COST OBJECTS AND THEIR PERFORMANCE MEASURES
PERFORM MONTE CARLO SIMULATIONS AND RELEVANT ANALYSES
OBTAIN AND CLEAN BILL OF MATERIALS FOR ALL COST OBJECTS
ESTIMATE THE BILL OF ACTIVITIES
It is important that the BOM does not contain any overhead costs that are not volume related in order to reduce possible distortions toa minimum
OBTAIN AND CLEAN BILL OF MATERIALS FOR ALL COST OBJECTS
ESTIMATE THE BILL OF ACTIVITIES
ESTIMATE THE COST OF COST OBJECTS AND THEIR PERFORMANCE MEASURES
BILL OF QUANTITY
Discuss some important engineering ______ that may greatly affect life-cycle costs and how to decide whether we should iterate the model implementation or not
PERFORM MONTE CARLO SIMULATIONS AND RELEVANT ANALYSES
MODEL THE UNCERTAINTY
IDENTIFY AND QUANTIFY THE RESOURCES
ENGINEERING ANALYSES
Every process within the system boundary is broken down into more and more detailed processes (activities), and thereby an activity _______ is created. The activities should be defined in enough detail to get reliable information.
IDENTIFY AND QUANTIFY RESOURCE AND ACTIVITY DRIVERS
CREATE AN ACTIVITY HIERARCHY AND NETWORK
OBTAIN AND CLEAN BILL OF MATERIALS FOR ALL COST OBJECTS
MODEL THE UNCERTAINTY
The objectives may include a complete life cycle, a decade, or another time frame, but the point is that we must include the relevant costs given the appropriate perspective
IDENTIFY THE RELATIONSHIPS BETWEEN ACTIVITY DRIVERS AND DESIGN CHANGES
MODEL THE UNCERTAINTY
IDENTIFY AND QUANTIFY 3THE RESOURCES
ESTIMATE THE COST OF COST OBJECTS AND THEIR PERFORMANCE MEASURES
The purpose of resource drivers is to trace how the activities consume resources, while activity drivers are to trace how the cost objects consume activities
IDENTIFY AND QUANTIFY THE RESOURCES
OBTAIN AND CLEAN BILL OF MATERIALS FOR ALL COST OBJECTS
ESTIMATE THE COST OF COST OBJECTS AND THEIR PERFORMANCE MEASURES
IDENTIFY THE RELATIONSHIPS BETWEEN ACTIVITY DRIVERS AND DESIGN CHANGES
Distinguish between two different design approaches.The simplest is when we want to select from several options. Here no relationships are needed since we are not interested in changing the design, only selecting
MODEL THE UNCERTAINTY
IDENTIFY THE RELATIONSHIPS BETWEEN ACTIVITY DRIVERS AND DESIGN CHANGES
ESTIMATE THE COST OF COST OBJECTS AND THEIR PERFORMANCE MEASURES
PERFORM MONTE CARLO SIMULATIONS AND RELEVANT ANALYSES
What is important to emphasize is that Monte Carlo methods, or simulation techniques, enable the most versatile handling of uncertainty
PERFORM MONTE CARLO SIMULATIONS AND RELEVANT ANALYSES
ESTIMATE THE COST OF COST OBJECTS AND THEIR PERFORMANCE MEASURES
ESTIMATE THE BILL OF ACTIVITIES
MODEL THE UNCERTAINTY
In Step _ resources are traced to activities, whereas in this step activity costs are traced to cost objects. From this, it is evident that Step is the first step in an ABC system, whereas Step _ is the second step.
DEFINE THE SCOPE OF THE MODEL AND THE CORRESPONDING COST OBJECTS
ESTIMATE THE COST OF COST OBJECTS AND THEIR PERFORMANCE MEASURES
OBTAIN AND CLEAN BILL OF MATERIALS FOR ALL COST OBJECTS
ESTIMATE THE BILL OF ACTIVITIES
