BUSI 601: STRATEGIC ANALYSIS AND
DECISION MAKING
⩥Balance Scorecard (BSC). 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. 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). Answer: A costing approach that
assigns resource costs to cost objects based on activities performed for
the cost objects
⩥ Volume Based Costing. 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). Answer: Identifies customer
service activities, cost drivers, and the profitability of each individual-
customer or customer group.
⩥ Target Costing. 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. 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. 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. Answer: The development of a well-
defined relationship between a cost object and its cost drivers for the
purpose of predicting the cost.
DECISION MAKING
⩥Balance Scorecard (BSC). 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. 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). Answer: A costing approach that
assigns resource costs to cost objects based on activities performed for
the cost objects
⩥ Volume Based Costing. 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). Answer: Identifies customer
service activities, cost drivers, and the profitability of each individual-
customer or customer group.
⩥ Target Costing. 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. 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. 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. Answer: The development of a well-
defined relationship between a cost object and its cost drivers for the
purpose of predicting the cost.
