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Definition of overhead costs
overhead generally refers to indirect, in contrast to direct,
The charge to expense of the direct materials, direct labor, and
The percentage of the assets that were spent to run a mutual fund (as of the last annual
Expenses or costs that remain the same in amount,
That portion of total overhead costs which remains constant in size
The allocation of either under- or over-allocated overhead costs among the
The incremental costs of having an agent make decisions for a principal.
the amount of overhead that has been assigned to Work in Process Inventory as a result of productive activity; credits for this amount are to an overhead account
costs that are identifiable with and able to be influenced by decisions made at the business
When a cost is recorded originally as an increase
costs that increase with increases in the level of investment in current assets.
costs of maintaining current assets, including opportunity cost of capital.
A particularly egregious form of aggressive cost capitalization
costs arising from bankruptcy or distorted business decisions before bankruptcy.
costs that are readily traceable to particular products or services.
The difference between the execution price of a security and the price that would have
All the costs incurred during the manufacturing process, minus the
Financial distress costs
Legal and administrative costs of liquidation or reorganization. Also includes
costs that do not change with increases or decreases in the volume of goods or services
costs that do not depend on the level of output.
fixed overhead spending variance
the difference between the total actual fixed overhead and budgeted fixed overhead;
fixed overhead volume variance
see volume variance
costs, both implied and direct, associated with a transaction. Such costs include time, effort,
The price of obtaining capital, either borrowed or equity, with intent to carry on business operations.
Incremental costs and benefits
costs and benefits that would occur if a particular course of action were
costs that are necessary to produce a product/service but are not readily traceable to particular products or services – see overhead.
Transaction costs that include the assessment of the investment merits of a financial asset.
Market impact costs
Also called price impact costs, the result of a bid/ask spread and a dealer's price concession.
Market timing costs
costs that arise from price movement of the stock during the time of the transaction
The costs to firms of changing their prices.
A general term referring to period costs, such as selling, administration and financial expenses.
The difference in the performance of an actual investment and a desired investment
a credit balance in the overhead account
Any cost other than a direct cost – may refer to an indirect production cost and/or to a non-production expense.
any factory or production cost that is indirect to
The process of spreading production overhead equitably over the volume of production of goods or services.
overhead application rate
see predetermined overhead rate
overhead efficiency variance
the difference between total budgeted overhead at actual hours and total budgeted
The rate (often expressed per hour) applied to the time taken to produce a product/service, used to allocate production overheads to particular products/services based on the time taken. May be calculated on a business-wide or cost centre basis.
overhead spending variance
the difference between total actual overhead and total budgeted overhead at actual
The costs that relate to a period of time.
Policy Acquisition Costs
costs incurred by insurance companies in signing new policies, including expenditures on commissions and other selling expenses, promotion expenses, premium
The costs of additional regulation, including higher taxes, borne by large and
predetermined overhead rate
an estimated constant charge per unit of activity used to assign overhead cost to production or services of the period; it is calculated by dividing total budgeted annual overhead at a selected level of volume or activity by that selected measure of volume or activity; it is also the standard overhead application rate
A form of start-up cost incurred in preparing for the opening of a new store or facility.
Price impact costs
Related: market impact costs
A general term referring to indirect costs.
Round-trip transactions costs
costs of completing a transaction, including commissions, market impact
costs associated with locating a counterparty to a trade, including explicit costs (such as
costs that are constant within a defined level of activity but that can increase or decrease when
costs that have both fixed and variable components.
costs incurred from shortages in current assets.
A budget cost for materials and labour used for decision-making, usually expressed as a per unit cost that is applied to standard quantities from a bill of materials and to standard times from a
standard overhead application rate
a predetermined overhead rate used in a standard cost system; it can be a separate variable or fixed rate or a combined overhead rate
costs related to such onetime activities as opening a new facility, introducing
costs that have been incurred and cannot be reversed.
costs that have been incurred in the past.
costs that have been incurred and cannot be recovered.
total overhead variance
the difference between total actual overhead and total applied overhead; it is the amount of underapplied or overapplied overhead
costs of buying and selling marketable securities and borrowing. Trading costs include
The time, effort, and money necessary, including such things as commission fees and the
Undepreciated Capital Costs
The tax definition of the value of an asset that is eligible for tax deprecation.
a debit balance in the overhead account at the end of a period; when the applied overhead amount is less than the actual overhead that was incurred
costs that change as the level of output changes.
variable overhead efficiency variance
the difference between budgeted variable overhead based on actual input activity and variable overhead applied to production
variable overhead spending variance
the difference between total actual variable overhead and the budgeted amount of variable overhead based on actual input activity
a cost accumulation and reporting
Refers to the sum of manufacturing direct labor and overhead
Cost of goods sold
The accumulated total of all costs used to create a product or service,
A cost that is not directly associated with a single activity or event. Such
the total of all costs (direct material, direct labor,
normal cost system
a valuation method that uses actual
This is a key factor in the profit model of a business. Product
The total of all costs assigned to a product, typically including direct
standard cost system
a valuation method that uses predetermined
a cost accumulation and reporting method
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