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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.
a graph that depicts the relationships among revenues, variable costs, fixed costs, and profits (or losses)
Also the difference between the selling price and variable costs, which can be expressed either per
the difference between selling price and
The margin that results when variable production costs are subtracted
the proportion of each revenue dollar remaining after variable costs have been covered;
The idea that fixed costs and variable costs react differently to changes in the volume of
the relative composition of an organization’s
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,
the proportion of each revenue dollar
The incremental costs of having an agent make decisions for a principal.
costs that are identifiable with and able to be influenced by decisions made at the business
When a cost is recorded originally as an increase
costs that increase with increases in the level of investment in current assets.
costs of maintaining current assets, including opportunity cost of capital.
Continuous random variable
A random value that can take any fractional value within specified ranges, as
Costs Capitalized in Stealth
A particularly egregious form of aggressive cost capitalization
costs of financial distress
costs arising from bankruptcy or distorted business decisions before bankruptcy.
an unknown item for which a linear programming
an unknown variable that is to be predicted
costs that are readily traceable to particular products or services.
Discrete random variable
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 that do not change with increases or decreases in the volume of goods or services
costs that do not depend on the level of output.
fixed expenses (costs)
Expenses or costs that remain the same in amount,
costs, both implied and direct, associated with a transaction. Such costs include time, effort,
The price of obtaining capital, either borrowed or equity, with intent to carry on business operations.
Incremental costs and benefits
costs and benefits that would occur if a particular course of action were
a variable that, when changed, will
costs that are necessary to produce a product/service but are not readily traceable to particular products or services – see overhead.
Transaction costs that include the assessment of the investment merits of a financial asset.
a critical factor that management believes will
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
The costs to firms of changing their prices.
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
The costs that relate to a period of time.
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.
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 are constant within a defined level of activity but that can increase or decrease when
costs incurred from shortages in current assets.
a variable used in a linear programming problem
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 related to such onetime activities as opening a new facility, introducing
costs that have been incurred and cannot be reversed.
costs that have been incurred in the past.
costs that have been incurred and cannot be recovered.
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
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
Undepreciated Capital Costs
The tax definition of the value of an asset that is eligible for tax deprecation.
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.
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
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.
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
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).
the practice of minimizing, to the extent
Direct materials mix variance
The variance between the budgeted and actual mixes of
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.
the proportionate relationship between
a graph that plots all known activity observations
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