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Definition of variable costs
costs that change as the level of output changes.
costs that have both fixed and variable components.
Also the difference between the selling price and variable costs, which can be expressed either per
The idea that fixed costs and variable costs react differently to changes in the volume of
The price at which profit is maximized, which takes into account the cost behaviour of fixed and variable costs and the relationship between price and demand for a product/service.
Overhead generally refers to indirect, in contrast to direct,
a graph that depicts the relationships among revenues, variable costs, fixed costs, and profits (or losses)
the difference between selling price and
the proportion of each revenue dollar remaining after variable costs have been covered;
the relative composition of an organization’s
the proportion of each revenue dollar
The margin that results when variable production costs are subtracted
The incremental costs of having an agent make decisions for a principal.
costs that increase with increases in the level of investment in current assets.
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.
The difference between the execution price of a security and the price that would have
A variable whose value is determined outside the model in which it is used. Also called
Financial distress costs
Legal and administrative costs of liquidation or reorganization. Also includes
costs, both implied and direct, associated with a transaction. Such costs include time, effort,
Incremental costs and benefits
costs and benefits that would occur if a particular course of action were
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
Normal random variable
A random variable that has a normal probability distribution.
The difference in the performance of an actual investment and a desired investment
Price impact costs
Related: market impact costs
A function that assigns a real number to each and every possible outcome of a random experiment.
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 have been incurred and cannot be reversed.
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
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,
Variable life insurance policy
A whole life insurance policy that provides a death benefit dependent on the
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 rated demand bond (VRDB)
Floating rate bond that can be sold back periodically to the issuer.
Variable rate loan
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.
costs that are identifiable with and able to be influenced by decisions made at the business
costs that are readily traceable to particular products or services.
costs that do not change with increases or decreases in the volume of goods or services
costs that are necessary to produce a product/service but are not readily traceable to particular products or services – see overhead.
The costs that relate to a period of time.
costs that are constant within a defined level of activity but that can increase or decrease when
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
costs that have been incurred in the past.
A cost that increases or decreases in proportion with increases or decreases in the volume of production of goods or services.
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.
capitalization of costs
When a cost is recorded originally as an increase
fixed expenses (costs)
Expenses or costs that remain the same in amount,
Expenses that change with changes in either sales volume
an unknown item for which a linear programming
an unknown variable that is to be predicted
a variable that, when changed, will
a critical factor that management believes will
a variable used in a linear programming problem
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 cost that varies in total in direct proportion
a cost accumulation and reporting method
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 that changes in amount in relation to changes in a related activity.
costs of maintaining current assets, including opportunity cost of capital.
costs of financial distress
costs arising from bankruptcy or distorted business decisions before bankruptcy.
costs that do not depend on the level of output.
costs incurred from shortages in current assets.
costs that have been incurred and cannot be recovered.
The costs to firms of changing their prices.
Costs Capitalized in Stealth
A particularly egregious form of aggressive cost capitalization
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
A form of start-up cost incurred in preparing for the opening of a new store or facility.
costs related to such onetime activities as opening a new facility, introducing
The price of obtaining capital, either borrowed or equity, with intent to carry on business operations.
Undepreciated Capital Costs
The tax definition of the value of an asset that is eligible for tax deprecation.
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 period of time in which all costs are variable; greater than one year.
A period of time in which all costs are variable; greater than one year.
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
the practice of minimizing, to the extent
the proportionate relationship between
a graph that plots all known activity observations
Direct materials mix variance
The variance between the budgeted and actual mixes of
An analytical technique for studying the relationships between fixed cost, variable cost, and profits. A breakeven chart graphically depicts the nature of breakeven analysis. The breakeven point represents the volume of sales at which total costs equal total revenues (that is, profits equal zero).
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