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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 random value that can take any fractional value within specified ranges, as
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
A random variable that has a normal probability distribution.
A function that assigns a real number to each and every possible outcome of a random experiment.
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 cost that is directly proportional to the volume of output produced. When production is zero,
A whole life insurance policy that provides a death benefit dependent on the
A security, such as stocks or bonds, that sells at a fluctuating, market-determined price.
Short-term certificate of deposits that pay interest periodically on roll dates. On each roll
Floating rate bond that can be sold back periodically to the issuer.
Loan made at an interest rate that fluctuates based on a base interest rate such as the
Those that vary with the amount of goods you produce or sell. These may include utility bills, labor, etc.
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.
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.
Costs that have both fixed and variable components.
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 cost that increases or decreases in proportion with increases or decreases in the volume of production of goods or services.
activity based costing (ABC)
A relatively new method advocated for the
Expenses that change with changes in either sales volume
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
an unknown item for which a linear programming
an unknown variable that is to be predicted
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 variable that, when changed, will
job order costing system
a system of product costing used
a critical factor that management believes will
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
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 determining what the cost of a
a cost that varies in total in direct proportion
variable cost ratio
the proportion of each revenue dollar
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
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 costing methodology that only assigns direct labor and material costs
First in, first-out costing method (FIFO)
A process costing methodology that assigns the earliest
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.
A cost that changes in amount in relation to changes in a related activity.
Costs that change as the level of output changes.
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.
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