Management Accounting: Foundations and Data Analysis

A Comprehensive collection of vocabulary flashcards covering introductory Management Accounting concepts, data processing, sampling techniques, and cost behaviour classification.

Cost accounting

The gathering of cost information and its attachment to cost objects, the establishment of budgets, standard costs and actual costs, and the analysis of variances.

Management accounting

The application of accounting and financial management principles to create, protect, preserve, and increase value for shareholders.

Planning

Defining objectives and assessing future costs and revenues to set up a budget.

Control

Comparing actual performance with detailed operational plans to identify deviations and take corrective action.

Strategic planning

The long-term process of deciding on objectives of the organization and the resources and policies used to attain them.

Tactical control

The process by which managers assure that resources are obtained and used effectively and efficiently to accomplish the organization's objectives.

Operational control

The process of assuring that specific tasks are carried out effectively and efficiently on a day-to-day basis.

Efficiency

Achieving the optimum output from the input resources used, such as the productivity of labour or material usage.

Effectiveness

Ensuring that the outputs obtained are in line with the intended objectives or targets.

Data

The raw material for data processing relating to facts, events, and transactions.

Information

Data that has been processed in some way to make it meaningful to the person who receives it.

ACCURATE

An acronym for the qualities of good information: Accurate, Complete, Cost-beneficial, User-targeted, Relevant, Authoritative, Timely, and Easy to use.

Primary data

Data collected specifically for a particular purpose.

Secondary data

Data which has already been collected elsewhere for some other purpose but can be adapted for a survey.

Discrete data

Numerical data which can only take on a finite or countable number of values within a given range.

Continuous data

Numerical data that can take on any value and is measured rather than counted.

Nominal data

Categorical data that serves as a name or label and has no set order.

Ordinal data

Categorical data that has a set order or scale, such as quality ratings or satisfaction levels.

Simple random sample

A sample selected in such a way that every member in the population has an equal chance of being included.

Sampling frame

A numbered list of all items in a population used to facilitate random sampling.

Systematic sampling

A sampling method which works by selecting every $n^{th}$ item after a random start.

Stratified sampling

A method that involves dividing the population into strata and taking random samples from each to ensure the sample structure reflects the population.

Multistage sampling

A probability sampling method involving dividing the population into sub-populations and selecting samples from them, repeating the process over several stages.

Quota sampling

A non-random sampling method where investigators interview everyone they meet up to a certain fixed quota.

Cluster sampling

A non-random sampling method selecting one definable subsection of the population intended to be representative of the whole.

Production costs

Costs associated with the production of goods and services from raw material supply to the end of the production process.

Direct cost

A cost that can be traced in full to the product, service, or department being costed.

Indirect costs

Costs incurred in making a product or service that cannot be identified with a particular cost unit; also known as production overheads.

Prime cost

The summation of direct materials, direct labour, and direct expenses.

Fixed cost

A cost which tends to be unaffected by increases or decreases in the volume of output within a span of time.

Variable cost

A cost which tends to vary with the volume of output.

Stepped fixed cost

A cost which is fixed in nature but only within certain levels of activity.

Semi-variable cost

A cost containing both fixed and variable components, also referred to as a mixed cost.

Cost object

Anything for which cost data is desired, such as a product, service, job, customer, or department.

Cost unit

A unit of product or service in relation to which costs may be ascertained.

Cost centre

A location, function, or item of equipment in respect of which costs may be ascertained for control purposes.

High low method

A technique used to separate the fixed and variable elements of a semi-variable cost based on two activity levels.

Linear function formula

The relationship defined as $y = a + bx$, where $y$ is total cost, $a$ is fixed cost, $b$ is variable cost per unit, and $x$ is output level.