CPP Cost Management & Budgeting Flashcards
6 cards from real CPP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CPP Cost Management & Budgeting flashcards as text
What is 'variance analysis' in packaging budget management?
Answer: The process of comparing actual packaging costs to budgeted costs and explaining differences
Variance analysis compares actual packaging spend to the budgeted amounts, identifies unfavorable or favorable differences, and investigates root causes to improve future forecasting.
What is 'zero-based budgeting' (ZBB) as applied to packaging department budgets?
Answer: Starting the packaging budget at zero dollars and rebuilding it from scratch each period based on justified needs
Zero-based budgeting requires every packaging expense to be justified from scratch each budget cycle rather than incrementally adjusting the prior year's budget.
What is 'price-volume-mix analysis' in the context of packaging cost reporting?
Answer: An analytical framework separating the impact of price changes, volume changes, and product mix shifts on total packaging costs
Price-volume-mix analysis decomposes changes in packaging costs into three components: price changes, volume changes, and shifts in the mix of packaging types used.
What is a 'cost avoidance' saving in packaging cost management?
Answer: Preventing a cost increase from occurring through proactive action, without reducing current spend
Cost avoidance refers to actions that prevent future costs from occurring (e.g., negotiating a price freeze instead of accepting a supplier's proposed increase), distinct from cost reduction which lowers current spend.
What is 'kaizen costing' in manufacturing and packaging operations?
Answer: A continuous improvement approach focused on making incremental cost reductions during the production phase
Kaizen costing sets ongoing incremental cost reduction targets during the production phase and focuses manufacturing teams on continuous small improvements to meet those targets.
What does a 'cost-benefit analysis' (CBA) help a packaging manager determine?
Answer: Whether the quantified benefits of a packaging decision outweigh its total costs
A cost-benefit analysis quantifies and compares all costs and benefits of a packaging decision or investment to determine if the benefits justify the expenditure.