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20 Cards in this Set

  • Front
  • Back
Incremental cost
Additional cost incurred only if a company pursues a specific course of action.
Controllable variance
Combination of both overhead spending variances (variable and fixed) and the variable overhead efficiency variance.

OH Spending Variances (variable and fixed) + variable overhead efficiency variance
Cost variance
Difference between the actual incurred cost and the standard cost.

Actual incurred cost - standard cost
Efficiency variance
Difference between the actual quantity of an input and the standard quantity of that input.

actual quantity of an input - standard quantity of that input
Favorable variance
Difference in actual revenues or expenses from the budgeted amount that contributes to a higher income.
Overhead cost variance
Difference between the total overhead cost applied to products and the total overhead cost actually incurred.
Price variance
Difference between actual and budgeted revenue or cost caused by the difference between the actual price per unit and the budgeted price per unit.
Quantity variance
Difference between actual and budgeted revenue or cost caused by the difference between the actual number of units and the budgeted number of units.
Spending variance
Difference between the actual price of an item and its standard price.
Standard costs
Costs that should be incurred under normal conditions to produce a product or component or to perform a service.
Unfavorable variance
Difference in revenues or costs, when the actual amount is compared to the budgeted amount, that contributes to a lower income.
Volume variance
Difference between two dollar amounts of fixed overhead cost; one amount is the total budgeted overhead cost, and the other is the overhead cost allocated to products using the predetermined fixed overhead rate.
Mixed cost
Cost that behaves like a combination of fixed and variable costs.
Step-wise cost
Cost that remains fixed over limited ranges of volumes but changes by a lump sum when volume changes occur outside these limited ranges.
Curvilinear cost
Cost that changes with volume but not at a constant rate.
Fixed cost
Cost that does not change with changes in the volume of activity.
Opportunity Cost
Potential benefit lost by choosing a specific action from one or more alternatives.
Out-of-Pocket Cost
Cost incurred or avoided as a result of management's decisions.
Sunk cost
Cost already incurred and cannot be avoided or changed.
Variable Cost
Cost that changes in proportion to changes in the activity output volume.