![]() |
|
Financial Terms | |
Variable costing |
Information about financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit.
Main Page: tax advisor, finance, money, financial advisor, inventory control, accounting, inventory, stock trading, |
Definition of Variable costingVariable costingA 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. variable costinga cost accumulation and reporting method
Related Terms:direct costingsee variable costing Absorption costingA method of costing in which all fixed and variable production costs are charged to products or services using an allocation base. absorption costinga cost accumulation and reporting Absorption costingA methodology under which all manufacturing costs are assigned Activity-based costingA 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. activity based costing (ABC)A relatively new method advocated for the ![]() activity-based costing (ABC)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 attribute-based costing (ABC II)an extension of activitybased costing using cost-benefit analysis (based on increased customer utility) to choose the product attribute backflush costinga streamlined cost accounting method that speeds up, simplifies, and reduces accounting effort in an environment that minimizes inventory balances, requires Continuous random variableA random value that can take any fractional value within specified ranges, as decision variablean unknown item for which a linear programming dependent variablean unknown variable that is to be predicted Direct costingA costing methodology that only assigns direct labor and material costs Discrete random variableA random variable that can take only a certain specified set of discrete possible ![]() Endogenous variableA value determined within the context of a model. Exogenous variableA 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 full costingsee absorption costing hybrid costing systema costing system combining characteristics independent variablea variable that, when changed, will Job costingA method of accounting that accumulates the costs of a product/service that is produced either job order costing systema system of product costing used Kaizen costingThe process of continual cost reduction that occurs after a product key variablea critical factor that management believes will life cycle costingthe accumulation of costs for activities that Lifecycle costingAn 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 variableA random variable that has a normal probability distribution. Process costingA 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. Process costingA costing methodology that arrives at an individual product cost through the calculation of average costs for large quantities of identical products. process costing systema method of accumulating and assigning costs to units of production in companies producing large quantities of homogeneous products; Random variableA function that assigns a real number to each and every possible outcome of a random experiment. relevant costinga process that compares, to the extent possible Semi-variable costsCosts that have both fixed and variable components. slack variablea 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 surplus variablea variable used in a linear programming problem that represents overachievement of a minimum requirement; it is associated with greater-than-or-equal-to constraints Target costingA 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. target costinga method of determining what the cost of a VariableA value determined within the context of a model. Also called endogenous variable. Variable annuitiesAnnuity contracts in which the issuer pays a periodic amount linked to the investment Variable AnnuityA 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. Variable costA cost that is directly proportional to the volume of output produced. When production is zero, Variable costA cost that increases or decreases in proportion with increases or decreases in the volume of production of goods or services. variable costa cost that varies in total in direct proportion Variable costA cost that changes in amount in relation to changes in a related activity. variable cost ratiothe proportion of each revenue dollar variable costsCosts that change as the level of output changes. VARIABLE EXPENSESThose that vary with the amount of goods you produce or sell. These may include utility bills, labor, etc. variable expensesExpenses that change with changes in either sales volume Variable life insurance policyA whole life insurance policy that provides a death benefit dependent on the variable overhead efficiency variancethe difference between budgeted variable overhead based on actual input activity and variable overhead applied to production variable overhead spending variancethe difference between total actual variable overhead and the budgeted amount of variable overhead based on actual input activity Variable price securityA security, such as stocks or bonds, that sells at a fluctuating, market-determined price. Variable rate CDsShort-term certificate of deposits that pay interest periodically on roll dates. On each roll Variable rate loanLoan 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 Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |