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Definition of Variable costing
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 cost accumulation and reporting method
see variable costing
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
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;
A cost allocation system that compiles costs and assigns
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 random value that can take any fractional value within specified ranges, as
an unknown item for which a linear programming
an unknown variable that is to be predicted
A costing methodology that only assigns direct labor and material costs
A random variable that can take only a certain specified set of discrete possible
A value determined within the context of a model.
A variable whose value is determined outside the model in which it is used. Also called
FIFO method (of process costing)
the method of cost assignment that computes an average cost per equivalent
First in, first-out costing method (FIFO)
A process costing methodology that assigns the earliest
see absorption costing
hybrid costing system
a costing system combining characteristics
a variable that, when changed, will
A method of accounting that accumulates the costs of a product/service that is produced either
job order costing system
a system of product costing used
The process of continual cost reduction that occurs after a product
a critical factor that management believes will
life cycle costing
the accumulation of costs for activities that
An approach to costing that estimates and accumulates the costs of a product/service over
modified FIFO method (of process costing)
the method of cost assignment that uses FIFO to compute a cost per
Normal random variable
A random variable that has a normal probability distribution.
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 costing methodology that arrives at an individual product cost through the calculation of average costs for large quantities of identical products.
process costing system
a method of accumulating and assigning costs to units of production in companies producing large quantities of homogeneous products;
A function that assigns a real number to each and every possible outcome of a random experiment.
a process that compares, to the extent possible
Costs that have both fixed and variable components.
a variable used in a linear programming problem
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 variable used in a linear programming problem that represents overachievement of a minimum requirement; it is associated with greater-than-or-equal-to constraints
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 determining what the cost of a
A value determined within the context of a model. Also called endogenous variable.
Annuity contracts in which the issuer pays a periodic amount linked to the investment
A form of annuity policy under which the amount of each benefit is not guaranteed or specified. The amounts fluctuate according to the earnings of a separate investment account.
A cost that is directly proportional to the volume of output produced. When production is zero,
A cost that increases or decreases in proportion with increases or decreases in the volume of production of goods or services.
a cost that varies in total in direct proportion
A cost that changes in amount in relation to changes in a related activity.
variable cost ratio
the proportion of each revenue dollar
Costs that change as the level of output changes.
Those that vary with the amount of goods you produce or sell. These may include utility bills, labor, etc.
Expenses that change with changes in either sales volume
Variable life insurance policy
A whole life insurance policy that provides a death benefit dependent on the
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
Variable price security
A security, such as stocks or bonds, that sells at a fluctuating, market-determined price.
Variable rate CDs
Short-term certificate of deposits that pay interest periodically on roll dates. On each roll
Variable rate loan
Loan made at an interest rate that fluctuates based on a base interest rate such as the
Variable rated demand bond (VRDB)
Floating rate bond that can be sold back periodically to the issuer.
weighted average method (of process costing)
the method of cost assignment that computes an average cost per
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