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AIM 3341 Exam 1 Notes - AIM 3341 Exam 1 Notes 1...

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AIM 3341 Exam 1 Notes: 1. Organizational core competencies can include: a. Patents, copyrights and special legal protection 2. Organizational strategies: a. Are reconsidered periodically in response to changes in the organization or environment 3. Uncertainties: a. Are issues about which managers have doubts 4. Fixed Costs per unit: a. Vary inversely with changes in volume 5. Mixed costs: a. Consist of fixed and variable costs 6. A learning curve is the rate at which: a. Labor hours decrease as production increases when a new product is manufactured 7. At the breakeven point: a. Sales will be equal to variable costs plus fixed costs 8. The margin of safety is: a. The difference between estimated sales and breakeven sales 9. If all other factors remain unchanged, a 10% decrease in both the selling price and variable costs will: a. Have no effect on the BEP in dollars CH1 Organizational Strategies: Long-Term Goals Organizational Structure Financial Structure Long-Term Resource Allocation (investments/divestments; Nature of operations; Products or services and markets) Cost Accounting – a technique or method for determining the cost of a project, process, or thing; the information is determined though “direct measurement, arbitrary assignment, or systematic and rational allocation Management Accounting – the process of gathering, summarizing, and reporting financial and nonfinancial information used internally by managers to make decisions Financial Accounting – the process of preparing and reporting financial information used most frequently by decision makers outside of the org., such as shareholders and creditors Internal Report – a document that presents info for use only inside and org. Support Org. Strategies Capital Budgets Product Development
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Analysis of potential acquisitions Support Operating Plans Operating Budget Analysis of product mix Cash flow plan Monitor and Motivate Actual versus planned performance Bonus computations Supplier quality External Report – a document that presents info for use outside the org. Higher Quality decisions result from better information as well as from better decision processes which are more thorough and unbiased. Steps for better Thinking: 1. Foundation – Knowledge and Skills 2. Identifying – identify the problem, relevant info, and uncertainties 3. Exploring – interpretations and connections 4. Prioritizing – prioritize alternatives and implement conclusions 5. Envisioning – envision and direct; strategic innovation
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