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Definition of direct costing
see variable costing
A costing methodology that only assigns direct labor and material costs
A method of cash budgeting based on detailed estimates of cash receipts and cash
Lease in which the lessor purchases new equipment from the manufacturer and leases it to the
Commercial paper sold directly by the issuer to investors.
Selling a new issue not by offering it for sale publicly, but by placing it with one of several
For foreign exchange, the number of U.S. dollars needed to buy one unit of a foreign currency.
Buyers and sellers seek each other directly and transact directly.
The purchase by investors of securities directly from the issuer.
The acquisition abroad of physical assets such as plant and equipment, with
For foreign exchange, the number of units of a foreign currency needed to buy one U.S.$.
A method of costing in which all fixed and variable production costs are charged to products or services using an allocation base.
A 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.
Costs that are readily traceable to particular products or services.
Costs that are necessary to produce a product/service but are not readily traceable to particular products or services – see overhead.
A method of accounting that accumulates the costs of a product/service that is produced either
An approach to costing that estimates and accumulates the costs of a product/service over
A method of costing for continuous manufacture in which costs for an accounting compared are compared with production for the same period to determine a cost per unit produced.
A method of costing that is concerned with managing whole-of-life costs of a product/service during the product design phase – the difference between target price (to achieve market share) and the target profit margin.
A method of costing in which only variable production costs are treated as product costs and in which all fixed (production and non-production) costs are treated as period costs.
A method of preparing the operating section of the Statement of Cash Flows that uses the company’s actual cash inflows and cash outflows.
Direct write-off method
A method of adjusting accounts receivable to the amount that is expected to be collected by eliminating the account balances of specific nonpaying customers.
A method of preparing the operating section of the Statement of Cash Flows that does not use the company’s actual cash inflows and cash outflows, but instead arrives at the net cash flow by taking net income and adjusting it for noncash expenses and the changes from last year in the current assets and current liabilities.
activity based costing (ABC)
A relatively new method advocated for the
a cost accumulation and reporting
activity-based costing (ABC)
a process using multiple cost drivers to predict and allocate costs to products and services;
attribute-based costing (ABC II)
an extension of activitybased costing using cost-benefit analysis (based on increased customer utility) to choose the product attribute
a streamlined cost accounting method that speeds up, simplifies, and reduces accounting effort in an environment that minimizes inventory balances, requires
a cost that is distinctly traceable to a particular cost object
the time spent by individuals who work specifically
a readily identifiable part of a product; the cost of such a part
a service department cost allocation approach
FIFO method (of process costing)
the method of cost assignment that computes an average cost per equivalent
see absorption costing
hybrid costing system
a costing system combining characteristics
a cost that cannot be traced explicitly to a particular
job order costing system
a system of product costing used
life cycle costing
the accumulation of costs for activities that
modified FIFO method (of process costing)
the method of cost assignment that uses FIFO to compute a cost per
process costing system
a method of accumulating and assigning costs to units of production in companies producing large quantities of homogeneous products;
a process that compares, to the extent possible
strict FIFO method (of process costing)
the method of cost assignment that uses FIFO to compute a cost per equivalent unit and, in transferring units from a department, keeps the
a method of determining what the cost of a
a cost accumulation and reporting method
weighted average method (of process costing)
the method of cost assignment that computes an average cost per
A methodology under which all manufacturing costs are assigned
Activity-based costing (ABC)
A cost allocation system that compiles costs and assigns
A cost that can be clearly associated with specific activities or products.
Labor that is specifically incurred to create a product.
Direct materials cost
The cost of all materials used in a cost object, such as finished goods.
Direct materials mix variance
The variance between the budgeted and actual mixes of
A member of a company’s Board of directors.
First in, first-out costing method (FIFO)
A process costing methodology that assigns the earliest
A cost that is not directly associated with a single activity or event. Such
The cost of any labor that supports the production process, but which is
The process of continual cost reduction that occurs after a product
A costing methodology that arrives at an individual product cost through the calculation of average costs for large quantities of identical products.
Taxes paid by consumers when they buy goods and services. A sales tax is an example.
The direct transfer of payroll funds from the company bank account
A format for the operating section of the cash-flow statement that reports actual cash receipts and cash disbursements from operating activities.
Advertising designed to elicit sales to customers who can be
A format for the operating section of the cash-flow statement that
A system where funds are electronically credited to your account by a financial institution or a payroll service. For example, you can arrange with your employer to have your pay cheques automatically deposited into your no fee bank account.
Interac® Direct Payment
Instead of paying with cash or a credit card, Interac direct Payment allows you to pay for your purchase with a debit card, such as your bank card. The amount of the purchase is electronically debited, or withdrawn, from your bank account (see debit card).
pre-authorized direct deposit
A system where funds are electronically credited to your account by a financial institution or a payroll service.
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