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Definition of predictor
an activity measure that, when changed, is accompanied
A theory that spot prices at some future date will be equal to today's forward rates.
assign based on the use of a cost driver, a cost predictor,
States that the interest rate differential between two countries should be an
A method of costing in which all fixed and variable production costs are charged to products or services using an allocation base.
a cost accumulation and reporting
A methodology under which all manufacturing costs are assigned
Schedule of depreciation rates allowed for tax purposes.
Clause causing repayment of a debt, if specified events occur or are not met.
a repetitive action performed in fulfillment of business functions
the process of detailing the various repetitive actions that are performed in making a product or
A method of budgeting that develops budgets based on expected activities and cost drivers – see also activity-based costing.
planning approach applying activity drivers to estimate the levels and costs of activities necessary to provide the budgeted quantity and
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.
A relatively new method advocated for the
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
activity-based management (ABM)
a discipline that focuses on the activities incurred during the production/performance process as the way to improve the value received
a segment of the production or service
a measure of the demands on activities and,
The actual expenditure made to acquire an asset, which includes the supplierinvoiced
actual cost system
a valuation method that uses actual direct
Agency cost view
The argument that specifies that the various agency costs create a complex environment in
The incremental costs of having an agent make decisions for a principal.
The analysis of principal-agent relationships, wherein one person, an agent, acts on behalf of
Aggressive Cost Capitalization
cost capitalization that stretches the flexibility within generally
a process of service department cost allocation
Total costs, explicit and implicit.
Allocation base A measure of activity or volume such as labour
hours, machine hours or volume of production
A method of adjusting accounts receivable to the amount that is expected to be collected based on company experience.
cost of a security adjusted for the amortization of any purchase premium or
date on which particular news concerning a given company is announced to the public.
a quality control cost incurred for monitoring
Arbitrage Pricing Theory (APT)
An alternative model to the capital asset pricing model developed by
Asset activity ratios
Ratios that measure how effectively the firm is managing its assets.
methods of financing in which lenders and equity investors look principally to the
Loans granted usually by a financial institution where the asset being financed constitutes the sole security given to the lender.
The receipt of an exercise notice by an options writer that requires the writer to sell (in the case
This is the legal transfer on one person's interest in an insurance policy to another person or entity, such as to a bank to qualify for a loan
attribute-based costing (ABC II)
an extension of activitybased costing using cost-benefit analysis (based on increased customer utility) to choose the product attribute
Automated Clearing House (ACH)
A collection of 32 regional electronic interbank networks used to
Automated Clearing House (ACH)
A banking clearinghouse that processes direct
Average (across-day) measures
An estimation of price that uses the average or representative price of a
Average-Cost Inventory Method
The inventory cost-flow assumption that assigns the average
Average cost of capital
A firm's required payout to the bondholders and to the stockholders expressed as a
costs that are identifiable with and able to be influenced by decisions made at the business
a streamlined cost accounting method that speeds up, simplifies, and reduces accounting effort in an environment that minimizes inventory balances, requires
Variable that adjusts to maintain the consistency
Bankruptcy cost view
The argument that expected indirect and direct bankruptcy costs offset the other
A cost that is incurred when a group of products or services are produced,
a cost that is caused by a group of things
Benefit Ratio Method
The proportion of unemployment benefits paid to a company’s
Benefit Wage Ratio Method
The proportion of total taxable wages for laid off
Brokerage firms that help to find potential buyers or sellers of large block trades.
Bootstrapping, bootstrap method
An arithmetic method for backing an
Security prices sometimes move wildly above their true values.
a planned expenditure
an activity that is necessary for the operation of the business but for which a customer would not want to pay
A date before maturity, specified at issuance, when the issuer of a bond may retire part of the bond
Capital Cost Allowance (CCA)
The annual depreciation expense allowed by the Canadian Income Tax Act.
A method of constructing a replicating portfolio in which the manager purchases a
capitalization of costs
when a cost is recorded originally as an increase
Capitalized Cost An expenditure or accrual that is reported as an asset to be amortized against
costs that increase with increases in the level of investment in current assets.
the total variable cost of carrying one unit of
The cost of holding inventory, which can include insurance,
costs of maintaining current assets, including opportunity cost of capital.
The amount of cash expended.
Temporary investments of currently excess cash in short-term, high-quality
Cash Flow Provided or Used from Financing Activities
Cash receipts and payments involving
Cash Flow Provided or Used from Investing Activities
Cash receipts and payments involving
Changes in Financial Position
Sources of funds internally provided from operations that alter a company's
Clearing House Automated Payments System (CHAPS)
A computerized clearing system for sterling funds
Clearing house / Clearinghouse
An adjunct to a futures exchange through which transactions executed its floor are settled by a
Clearing House Interbank Payments System (CHIPS)
An international wire transfer system for high-value
A firm which buys and sells future contracts for customer accounts. Related: futures
a cost related either to the long-term investment
company cost of capital
Expected rate of return demanded by investors in a company, determined by the average risk of the company’s assets and operations.
A contract accounting method that recognizes contract revenue
Consolidated Omnibus Budget Reconciliation Act (COBRA)
A federal Act
a cost over which a manager has the ability to authorize incurrence or directly influence magnitude
Refers to the sum of manufacturing direct labor and overhead
the total of direct labor and overhead cost;
A resource sacrificed or forgone to achieve a specific objective (Horngren et al.), defined
the cash or cash equivalent value necessary to attain an
The expense incurred to create and sell a product or service. If a product is not
a discipline that focuses on techniques or
Cost Accounting Standards Board (CASB)
a body established by Congress in 1970 to promulgate cost accounting
the approach to product costing that determines
the assignment, using some reasonable basis,
the practice of finding acceptable alternatives
An asset’s purchase price, plus costs associated with the purchase, like installation fees, taxes, etc.
The idea that fixed costs and variable costs react differently to changes in the volume of
The calculation and comparison of the costs and benefits of a policy or project.
cost-benefit analysis the analytical process of comparing the
relative costs and benefits that result from a specific course
The net present value of an investment divided by the investment's initial cost. Also called
a responsibility center in which the manager has
A division or unit of an organization that is responsible for controlling costs.
Cost company arrangement
Arrangement whereby the shareholders of a project receive output free of
a company-wide attitude about the topics
the practice of minimizing, to the extent
The process of either reducing costs while maintaining the same level of productivity or maintaining costs while increasing productivity.
cost control system
a logical structure of formal and/or informal
A method of expensing the cost of a resource consumed by first determining
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