Cost Control and Management Flashcards

Vocabulary flashcards based on the lecture notes regarding the flow of cost control, fixed and variable costs, and terminology as defined by Mendoza and Felicen.

10 Flow of Cost Control

The sequence consisting of: 1) Forecasting, budgeting and standard setting, 2) Distributing responsibilities, 3) Planning, 4) Ordering and Purchasing, 5) Receiving, 6) Inventory, 7) Requisition and Issuance, 8) Production and Service, 9) Audit and Recording of Transaction, and 10) Corrective Measures.

Fixed cost

A cost that is normally unaffected by changes in sales volume.

Cost control

A process intended to carry out operations at reasonable cost without sacrificing quality of service and production.

Cost reduction

A practice that often entails the reduction of cost at the expense of quality.

Variable cost

A cost directly linked to the volume of business so that every increase or decrease to the volume brings a corresponding increase or decrease in cost.

Cost (Accountant's definition)

As defined by Mendoza and Felicen, the expenses of food service for goods and services when goods are consumed, or the services are rendered.

Mendoza and Felicen

The authors who defined cost for accountants as expenses for goods and services consumed or services rendered in a food service context.

Insurance premiums

Identified as an example of a fixed cost.

Rent

Identified as an example of a fixed cost.

Raw materials

Identified as an example of a variable cost.

Estate taxes

Identified as an example of a fixed cost.

Shipping fees

Identified as an example of a variable cost.

Utility bills

Identified as an example of a variable cost.

Sales commission

Identified as an example of a variable cost.

Depreciation on equipment

Identified as an example of a fixed cost.

Fuel price

Identified as an example of a variable cost.

License fee

Identified as an example of a variable cost.