Activity Analysis is an essential component of Activity-Based Costing (ABC) that involves identifying and describing activities within an organization, alongside their resource requirements.
Activity-Based Budgeting (ABB) is a budgeting method that allocates resources based on activities that incur costs in an organization, primarily used to refine budgeting accuracy and analyze performance.
Allocation of Resources refers to the central subject of economics involving how scarce factors of production are distributed among producers and how scarce goods are distributed among consumers.
Allocative efficiency is an economic concept that occurs when resources are distributed in a way that maximizes the net benefit to society. It reflects a situation where goods and services are produced according to consumer preferences, and marginal cost equals marginal benefit.
A budget constraint represents the various combinations of goods and services a consumer can purchase given their income and the prices of goods and services. It forms a crucial element in consumer choice theory within economics, illustrating the trade-offs consumers face as they allocate their limited resources among competing needs and wants.
The foundational questions that address what a society decides to produce, the methods used for production, and the distribution of the products among its members.
A command economy is an economic system where supply, demand, and the prices of goods and services are regulated by a central authority, often the government. This centralized control typically aims to manage a society's economy to ensure equal distribution of resources, rather than relying on market forces.
A deadlock is a situation in which two or more competing actions are waiting for the other to finish, and thus neither ever does.
A phenomenon in economics where adding additional units of resources to a production process results in smaller increments of output due to overcrowding, inefficiency, or less effective resource allocation.
Economic efficiency refers to the optimal allocation of resources where they are most valued and the production and distribution of goods and services occurs at the lowest possible cost. It ensures that no further improvements can be made in one person's well-being without making someone else worse off.
Economic freedom refers to the absence of regulation or other dictates from government or other authority in economic matters, enabling efficient allocation of resources in a capitalist system.
Economics is the study of how societies allocate scarce resources. It includes the examination of production, distribution, exchange, and consumption of goods and services.
An Expense Budget outlines the estimated costs that are expected to be incurred by an organization or individual over a specified future period. It serves as a financial plan, helping to allocate resources efficiently and set spending limits to achieve financial goals.
The branch of financial economics that is concerned with questions of business funding and the management of a business in the interests of shareholders, ensuring effective allocation of resources and maximizing shareholder value.
Implicit cost elements refer to the costs associated with missed opportunities in the utilization of a company's resources. These costs are not directly compensated through cash transactions but reflect the opportunity cost of applied resources.
A manager is a person responsible for administering and directing an organization's activities to achieve its goals efficiently and effectively.
A market economy is an economic system in which the production and prices of goods and services are determined by competition among privately owned businesses.
Market failure occurs when the equalization of supply and demand fails to produce an efficient allocation of resources from a social viewpoint. Causes for market failure include external economies, incomplete or poorly enforced property rights, and monopolistic characteristics of suppliers.
Market socialism refers to an economic system that combines elements of socialism with market mechanisms, where the government owns the means of production and directs investment, but distributes goods and services according to consumer demand and supply.
An economic system that relies upon markets to allocate resources and determine prices of goods and services.
An economic system combining private and public enterprise, where both market forces and government intervention are used to determine the allocation of resources and prices.
Mutually exclusive projects refer to a set of project alternatives where the selection of one project precludes the inclusion of the others due to constraints such as land or resources. For instance, using a parcel of land to build a factory means it cannot be used for an office block.
Neoclassical economics is a school of economic theory that flourished from about 1890 until the advent of Keynesian economics and asserts that market forces lead to efficient allocation of resources and full employment.
An operating budget is a comprehensive financial statement displaying projected revenues and expenses in a business. This budget helps in day-to-day decision-making and ensuring the effective allocation of resources.
Opportunity cost is the economic cost of an action measured in terms of the benefit foregone by not choosing the next best alternative. It plays a critical role in decision-making by considering the returns that could have been earned through alternative investments or actions.
PPBS is a comprehensive management framework used by organizations to integrate planning, programming, and budgeting processes to align resources with objectives and facilitate better decision-making.
A price system is an economic mechanism in which market-determined prices guide the allocation of resources, typically seen in capitalist economies.
The principal budget factor, also known as the limiting factor or constraint, refers to the element or resource that imposes a limitation on the organization’s budgeting process and overall production capabilities.
Production planning is the administrative operation that ensures material, labor, and other resources necessary for the production process are available when and where needed in the required quantities.
A graphical representation that shows the various combinations of outputs that an economy can produce given the available resources and technology.
A graphic representation of various possible outputs of two goods with a fixed supply of resources that are fully employed. Also called a transformation curve, it is useful for determining possible product mixes.
A method for limiting the purchase or usage of an item when the quantity demanded exceeds the quantity available at a specific price. Common during crises, rationing ensures fair distribution of scarce resources.
Resources include money, people, time, and equipment necessary for any organization. Resource allocation is a key part of a manager's decisional roles.
Resource allocation refers to the process of distributing available resources to various projects, departments, or business units to achieve organizational objectives efficiently.
Scheduling is the process of planning and deciding the timetable of events, including when and where certain activities will take place. It is a crucial aspect of time management and resource allocation across various fields such as project management, operations, transportation, and personal planning.
A trade-off involves giving up one benefit or advantage to gain another that seems more favorable. This concept is prevalent in various decision-making processes where resources such as time, money, and effort are limited. Trade-offs are a fundamental aspect of economics, business strategy, and personal decision-making. For example, investing in education might involve a financial loss in the short term but yield higher earning potential in the future.
Yield management, also known as revenue management, is a strategy used in various industries to optimize income and profit through dynamic pricing and resource allocation.
