value chain include the following: Securing raw material, energy, and other resources. Research and development.

t. Product design. Production. Marketing. Distribution and sales.

Theory of constraints: A management approach that focuses on identifying and relaxing the constraints that limit an organizations ability to reach a higher level of goal attainment. Suppose a delay occurred in the design process for Gap's line of summer clothing because too few designers were assigned to the project. This could result in a delay in contracting for the manufacturing of the summer line, which could ultimately delay the delivery of the products to Gap's many retail outlets. In this context, the design process is a bottleneck operation, meaning that it slows down the progress of Gap's products through the retailer's value chain

IMA STATEMENT OF ETHICAL PROFESSIONAL PRACTICE Members of IMA shall behave ethically. A commitment to ethical professional practice includes overarching principles that express our values and standards that guide our conduct. Principles Standards A member's failure to comply with the following standards may result in disciplinary action. Competence Each member has a responsibility to: 1. 2. 3. Maintain an appropriate level of professional expertise by continually developing knowledge and skills. Perform professional duties in accordance with relevant laws, regulations, and technical standards. Provide decision support information and recommendations that are accurate, clear, concise,

and timely. Recognize and communicate professional limitations or other constraints that would preclude responsible judgment or successful performance of an activity. p. 30 4. Confidentiality Each member has a responsibility to: 1. 2. 3. Keep information confidential except when disclosure is authorized or legally required. Inform all relevant parties regarding appropriate use of confidential information. Monitor subordinates' activities to ensure compliance. Refrain from using confidential information for unethical or illegal advantage.

Integrity Each member has a responsibility to: 1. 2. 3. Mitigate actual conflicts of interest. Regularly communicate with business associates to avoid apparent conflicts of interest. Advise all parties of any potential conflicts. Refrain from engaging in any conduct that would prejudice carrying out duties ethically. Abstain from engaging in or supporting any activity that might discredit the profession.

Credibility Each member has a responsibility to: 1. 2. 3. Communicate information fairly and objectively. Disclose all relevant information that could reasonably be expected to influence an intended user's understanding of the reports, analyses, or recommendations. Disclose delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or applicable law.

kaizen costing: The process of cost reduction during the manufacturing phase of a product. mass-customization: A manufacturing environment in which many standardized components are combined to produce custommade products to customer order. direct-labor : The cost of salaries, wages, and fringe benefits for personnel who work directly on the manufactured products.. conversion costs: Direct-labor cost+ manufacturing-overhead cost.

prime costs: The costs of direct material and direct labor. cost driver: A characteristic of an activity or event that results in the incurrence of costs by that activity or event. controllable cost: A cost that is subject to the control or substantial influence of a particular individual. Out-of-pocket costs: Costs incurred that require the expenditure of cash or other assets. differential cost: The difference in a cost item under two decision alternatives. incremental cost: The increase in cost from one alternative to another. A product-costing system: The process of accumulating the costs of a production process and assigning them to the products that constitute the organization's output. 82 accumulates the costs incurred in a production process and assigns those costs to the organization's final products. Product costs are needed for a variety of purposes in financial accounting, managerial accounting, and cost management.

job-order costing: A product-costing system in which costs are assigned to batches or job orders of production. Used by firms that produce relatively small numbers of dissimilar products. process-costing system: A product-costing system in which production costs are averaged over a large number of product units. Used by firms that produce large numbers of nearly identical products. job-cost record: A document that records the costs of direct material, direct labor, and manufacturing overhead for a particular production job or batch. The job-cost record is a subsidiary ledger account for the Work-in-Process Inventory account in the general ledger.

material requisition form: A document used by the production department supervisor to request the release of raw materials for production. Direct labor: In the accounting department, the time spent on each job will be multiplied by the employee's wage rate, and the cost will be recorded in Work-in-Process Inventory and on the appropriate job-cost records.