Key Terms - Chapter 14

Key Terms - Chapter 14 - Continuous improvement- Concept...

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Continuous improvement- Concept requiring every manager and employee continually to look to improve operations. Control- Practice of preparing budgets for a selected number of future periods and revising those budgets as each period is completed. Controllable or not controllable cost- Costs that a manager has the power to control or at least strongly influence. Conversion costs- Expenditures incurred in converting raw materials to finished goods; includes direct labor costs and overhead costs. Cost object- Product, process, department, or customer to which costs are assigned. Customer orientation- Company position that its managers and employees be in tune with the changing wants and needs of consumers. Cycle efficiency (CE)- A measure of production efficiency, which is defined as value-added (process) time divided by total cycle time. Cycle time (CT)- A measure of the time to produce a product or service, which is the sum of process time, inspection time, move time, and wait time; also called throughput time. Direct costs- Costs incurred for the benefit of one specific cost object. Direct labor- Efforts of employees who physically convert materials to finished product. Direct labor costs- Wages and salaries for direct labor that are separately and readily traced through the production process to finished goods. Direct material- Raw material that physically becomes part of the product and is clearly identified with specific products or
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Key Terms - Chapter 14 - Continuous improvement- Concept...

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