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Financial Terms | |
All-in cost |
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Definition of All-in costAll-in costTotal costs, explicit and implicit.
Related Terms:Capital Cost Allowance (CCA)The annual depreciation expense allowed by the Canadian Income Tax Act. cost allocationthe assignment, using some reasonable basis, Absorption costingA method of costing in which all fixed and variable production costs are charged to products or services using an allocation base. absorption costinga cost accumulation and reporting Absorption costingA methodology under which all manufacturing costs are assigned Accelerated cost recovery system (ACRS)Schedule of depreciation rates allowed for tax purposes. acid test ratio (also called the quick ratio)The sum of cash, accounts receivable, and short-term marketable ![]() Activity-based costingA method of costing that uses cost pools to accumulate the cost of significant business activities and then assigns the costs from the cost pools to products or services based on cost drivers. activity based costing (ABC)A relatively new method advocated for the activity-based costing (ABC)a process using multiple cost drivers to predict and allocate costs to products and services; Activity-based costing (ABC)A cost allocation system that compiles costs and assigns Actual costThe actual expenditure made to acquire an asset, which includes the supplierinvoiced actual cost systema valuation method that uses actual direct Agency cost viewThe argument that specifies that the various agency costs create a complex environment in Agency costsThe incremental costs of having an agent make decisions for a principal. Aggressive Cost Capitalizationcost capitalization that stretches the flexibility within generally ![]() All equity rateThe discount rate that reflects only the business risks of a project and abstracts from the All or noneRequirement that none of an order be executed unless all of it can be executed at the specified price. All-or-none underwritingAn arrangement whereby a security issue is canceled if the underwriter is unable allocateassign based on the use of a cost driver, a cost predictor, allocationthe systematic assignment of an amount to a recipient AllocationThe process of storing costs in one account and shifting them to other Allocation base A measure of activity or volume such as labourhours, machine hours or volume of production Allowance for bad debtsAn offset to the accounts receivable balance, against which Allowance for doubtful accountsA contra account related to accounts receivable that represents the amounts that the company expects will not be collected. Allowance for Doubtful AccountsAn estimate of the uncollectible portion of accounts receivable Allowance methodA method of adjusting accounts receivable to the amount that is expected to be collected based on company experience. ![]() Amortized Costcost of a security adjusted for the amortization of any purchase premium or appraisal costa quality control cost incurred for monitoring approximated net realizable value at split-off allocationa method of allocating joint cost to joint products using a Asset allocation decisionThe decision regarding how an institution's funds should be distributed among the attribute-based costing (ABC II)an extension of activitybased costing using cost-benefit analysis (based on increased customer utility) to choose the product attribute Average-Cost Inventory MethodThe inventory cost-flow assumption that assigns the average Average cost of capitalA firm's required payout to the bondholders and to the stockholders expressed as a Avoidable costscosts that are identifiable with and able to be influenced by decisions made at the business backflush costinga streamlined cost accounting method that speeds up, simplifies, and reduces accounting effort in an environment that minimizes inventory balances, requires Balloon maturityAny large principal payment due at maturity for a bond or loan with or without a a sinking Bankruptcy cost viewThe argument that expected indirect and direct bankruptcy costs offset the other Batch costA cost that is incurred when a group of products or services are produced, batch-level costa cost that is caused by a group of things Borrower falloutIn the mortgage pipeline, the risk that prospective borrowers of loans committed to be budgeted costa planned expenditure CallAn option that gives the right to buy the underlying futures contract. Call a. An option to buy a certain quantity of a stock or commodity for a Call an optionTo exercise a call option. Call dateA date before maturity, specified at issuance, when the issuer of a bond may retire part of the bond Call money rateAlso called the broker loan rate , the interest rate that banks charge brokers to finance Call optionAn option contract that gives its holder the right (but not the obligation) to purchase a specified Call OptionA contract that gives the holder the right to buy an asset for a call optionRight to buy an asset at a specified exercise price on or before the exercise date. Call priceThe price, specified at issuance, at which the issuer of a bond may retire part of the bond at a Call priceThe price for which a bond can be repaid before maturity under a call provision. Call protectionA feature of some callable bonds that establishes an initial period when the bonds may not be Call provisionAn embedded option granting a bond issuer the right to buy back all or part of the issue prior Call riskThe combination of cash flow uncertainty and reinvestment risk introduced by a call provision. Call swaptionA swaption in which the buyer has the right to enter into a swap as a fixed-rate payer. The CallableA financial security such as a bond with a call option attached to it, i.e., the issuer has the right to Callable bondA bond that allows the issuer to buy back the bond at a callable bondBond that may be repurchased by the issuer before maturity at specified call price. Capital allocationdecision allocation of invested funds between risk-free assets versus the risky portfolio. Capital Consumption AllowanceSee depreciation. capitalization of costsWhen a cost is recorded originally as an increase Capitalized Cost An expenditure or accrual that is reported as an asset to be amortized againstfuture-period revenue. Carring costscosts that increase with increases in the level of investment in current assets. carrying costthe total variable cost of carrying one unit of Carrying costThe cost of holding inventory, which can include insurance, carrying costscosts of maintaining current assets, including opportunity cost of capital. Cash costThe amount of cash expended. Chinese wallCommunication barrier between financiers (investment bankers) and traders. This barrier is committed costa cost related either to the long-term investment company cost of capitalExpected rate of return demanded by investors in a company, determined by the average risk of the company’s assets and operations. controllable costa cost over which a manager has the ability to authorize incurrence or directly influence magnitude conversion costRefers to the sum of manufacturing direct labor and overhead conversion costthe total of direct labor and overhead cost; CostA resource sacrificed or forgone to achieve a specific objective (Horngren et al.), defined costthe cash or cash equivalent value necessary to attain an CostThe expense incurred to create and sell a product or service. If a product is not cost accountinga discipline that focuses on techniques or Cost Accounting Standards Board (CASB)a body established by Congress in 1970 to promulgate cost accounting cost accumulationthe approach to product costing that determines cost avoidancethe practice of finding acceptable alternatives Cost basisAn asset’s purchase price, plus costs associated with the purchase, like installation fees, taxes, etc. Cost behaviourThe idea that fixed costs and variable costs react differently to changes in the volume of Cost-Benefit AnalysisThe calculation and comparison of the costs and benefits of a policy or project. cost-benefit analysis the analytical process of comparing therelative costs and benefits that result from a specific course Cost-benefit ratioThe net present value of an investment divided by the investment's initial cost. Also called cost centera responsibility center in which the manager has Cost centreA division or unit of an organization that is responsible for controlling costs. Cost company arrangementArrangement whereby the shareholders of a project receive output free of cost consciousnessa company-wide attitude about the topics cost containmentthe practice of minimizing, to the extent Cost controlThe process of either reducing costs while maintaining the same level of productivity or maintaining costs while increasing productivity. cost control systema logical structure of formal and/or informal Cost depletionA method of expensing the cost of a resource consumed by first determining Cost driverThe most significant cause of the cost of an activity, a measure of the demand for an activity cost drivera factor that has a direct cause-effect relationship Cost driverA factor that directly impacts the incidence of a cost, and which is generally cost driver analysisthe process of investigating, quantifying, cost leadership strategya plan to achieve the position in a Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |