|weighted average method (of process costing)|
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Definition of weighted average method (of process costing)
weighted average method (of process costing)
the method of cost assignment that computes an average cost per
Arithmetic mean return.
An arithmetic mean of selected stocks intended to represent the behavior of the market or some
The average project earnings after taxes and depreciation divided by the average
The weighted-average age of all of the firm's outstanding invoices.
The ratio of accounts receivables to sales, or the total
A firm's required payout to the bondholders and to the stockholders expressed as a
Also referred to as the weighted-average life (WAL). The average number of years that each
The average time to maturity of securities held by a mutual fund. Changes in interest rates
An estimation of price that uses the average or representative price of a
The ratio of the average cash inflow to the amount invested.
Taxes as a fraction of income; total taxes divided by total taxable income.
A method of constructing a replicating portfolio in which the manager purchases a
The time that elapses between receipt of payment from a customer and the
Under this currency translation method, all foreign currency balance-sheet and income
A conception of the way a stock's price changes that assumes that the price takes on all
Direct estimate method
A method of cash budgeting based on detailed estimates of cash receipts and cash
Dollar-weighted rate of return
Also called the internal rate of return, the interest rate that will make the
Dow Jones industrial average
This is the best known U.S.index of stocks. It contains 30 stocks that trade on
The practice of reporting to shareholders using straight-line depreciation and
In-house processing float
Refers to the time it takes the receiver of a check to process the payment and
Log-linear least-squares method
A statistical technique for fitting a curve to a set of data points. One of the
Market value-weighted index
An index of a group of securities computed by calculating a weighted average
Monetary / non-monetary method
Under this translation method, monetary items (e.g. cash, accounts
Used in charts and technical analysis, the average of security or commodity prices
The practice of making a charge in the income account equivalent to the tax savings
Price discovery process
The process of determining the prices of the assets in the marketplace through the
Accounting for an acquisition using market value for the consolidation of the two entities'
A method of allocating the purchase price for the acquisition of another firm among the
Simple compound growth method
A method of calculating the growth rate by relating the terminal value to
Simple moving average
The mean, calculated at any time over a past period of fixed length.
A method of cash budgeting that is organized along the lines of the statement of cash flows.
Under this currency translation method, the choice of exchange rate depends on the
Time-weighted rate of return
Related: Geometric mean return.
Weighted average cost of capital
Expected return on a portfolio of all the firm's securities. Used as a hurdle
Weighted average coupon
The weighted average of the gross interest rate of the mortgages underlying the
Weighted average life
Weighted average maturity
The WAM of a MBS is the weighted average of the remaining terms to maturity
Weighted average remaining maturity
The average remaining term of the mortgages underlying a MBS.
Weighted average portfolio yield
The weighted average of the yield of all the bonds in a portfolio.
An inventory valuation method that calculates a weighted average cost per unit for all the goods available for sale.
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.
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 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.
Weighted average cost of capital
See cost of capital.
A method of adjusting accounts receivable to the amount that is expected to be collected based on company experience.
A method of preparing the operating section of the Statement of Cash Flows that uses the company’s actual cash inflows and cash outflows.
Direct write-off method
A method of adjusting accounts receivable to the amount that is expected to be collected by eliminating the account balances of specific nonpaying customers.
A method of preparing the operating section of the Statement of Cash Flows that does not use the company’s actual cash inflows and cash outflows, but instead arrives at the net cash flow by taking net income and adjusting it for noncash expenses and the changes from last year in the current assets and current liabilities.
A method of accounting for inventory.
activity based costing (ABC)
A relatively new method advocated for the
weighted-average cost of capital
weighted means that the proportions of
Average Collection Period
average number of days necessary to receive cash for the sale of
Weighted Average Cost of Capital (WACC)
The weighted average of the costs of the capital components
a cost accumulation and reporting
activity-based costing (ABC)
a process using multiple cost drivers to predict and allocate costs to products and services;
a process of service department cost allocation
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
business process reengineering (BPR)
the process of combining information technology to create new and more effective
cost-benefit analysis the analytical process of comparing the
relative costs and benefits that result from a specific course
see variable costing
a service department cost allocation approach
dividend growth method
a method of computing the cost
FIFO method (of process costing)
the method of cost assignment that computes an average cost per equivalent
see absorption costing
a technique used to determine the fixed
hybrid costing system
a costing system combining characteristics
job order costing system
a system of product costing used
a manufacturing process that simultaneously
judgmental method (of risk adjustment)
an informal method of adjusting for risk that allows the decision maker
life cycle costing
the accumulation of costs for activities that
method of least squares
see least squares regression analysis
method of neglect
a method of treating spoiled units in the
modified FIFO method (of process costing)
the method of cost assignment that uses FIFO to compute a cost per
the ability of a worker to monitor
net present value method
a process that uses the discounted
benchmarking that focuses on practices and how the best-in-class companies achieved their results
an assessment about the number of processes through which a product flows
process costing system
a method of accumulating and assigning costs to units of production in companies producing large quantities of homogeneous products;
the actual time consumed performing the
a flowchart or diagram indicating every step
the total units produced during a period
process quality yield
the proportion of good units that resulted from the activities expended
product- (or process-) level cost
a cost that is caused by the development, production, or acquisition of specific products or services
a process that compares, to the extent possible
risk-adjusted discount rate method
a formal method of adjusting for risk in which the decision maker increases the rate used for discounting the future cash flows to compensate for increased risk
an iterative (sequential) algorithm used to solve multivariable, multiconstraint linear programming problems
a high-performance, data-driven approach to analyzing and solving the root causes of business problems
statistical process control (SPC)
the use of control techniques that are based on the theory that a process has natural variations in it over time, but uncommon variations
a process of service department cost allocation
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 method of determining what the cost of a
a cost accumulation and reporting method
weighted average cost of capital
a composite of the cost of the various sources of funds that comprise a firm’s capital structure; the minimum rate of return that must be earned on new investments so as not to dilute shareholder value
Bootstrapping, bootstrap method
An arithmetic method for backing an
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