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29 Cards in this Set
- Front
- Back
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Avoidable costs |
Costs that may be saved by not adopting a given alternative |
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Conversion costs |
The sum of direct labour and manufacturing overhead costs; it is the cost of converting raw materials into finished products |
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Cost allocation |
The process of assigning costs to cost objects where a direct measure of the resources consumed by these cost objects does not exist |
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Cost object |
Any activity for which a separate measurement of costs is desired |
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Differential costs |
The difference between the costs of each alternative action under consideration, also known as incremental costs |
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Direct labour costs |
Labour costs that can be specifically and exclusively identified with a particular cost object |
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Direct material costs |
Material costs that can be specifically and exclusively identified with a particular cost object |
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Fixed costs |
Costs that remain constant for a specified time period and which are not affected by the volume of activity |
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Incremental costs |
The difference between the costs of each alternative action under consideration, also known as differential costs |
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Indirect costs |
Costs that cannot be identified specifically and exclusively with a given cost object, also known as overheads |
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Irrelevant costs and revenues |
Future costs and revenues that will not be affected by a decision |
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Marginal cost |
The additional cost of one extra unit of output |
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Marginal revenue |
The additional revenue from one extra unit of output |
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Mixed costs |
Costs that contain both a fixed and a variable component, also known as semi-variable costs |
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Opportunity costs |
Costs that measure the opportunity that is sacrificed when the choice of one course of action required that an alternative is given up |
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Overheads |
Costs that cannot be identified specifically and exclusively with a given cost object, also known as indirect costs |
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Period costs |
Costs that are not included in the inventory valuation of goods and which are treated as expenses for the period in which they are incurred |
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Prime cost |
The sum of all direct manufacturing costs |
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Product costs |
Costs that are identified with goods purchased or produced for resale and which are attached to products and included in the inventory valuation of goods |
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Relevant costs and revenues |
Future costs and revenues that will be changed by a decision |
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Responsibility accounting |
Accounting that involves tracing costs and revenues to responsibility centres |
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Responsibility centre |
A unit or department within an organization for whose performance a manager is held responsible |
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Semi-fixed costs |
Costs that remain fixed within specified activity levels for a given amount of time but which eventually increase or decrease by a constant amount at critical activity levels; also known as step-fixed costs |
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Semi variable costs |
Costs that contain both a fixed and a variable component, also known as mixed costs |
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Step-fixed costs |
Costs that remain fixed within specified activity levels for a given amount of time but which eventually increase or decrease by a constant amount at critical activity levels; also known as semi-fixed costs |
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Sunk costs |
Costs that have been incurred by a decision made in the past and that cannot be changed by any decision that will be made in the future |
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Unavoidable costs |
Costs that cannot be saved, whether or not an alternative is adopted |
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Variable costs |
Costs that vary in direct proportion to the volume of activity |
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Variable costs
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Costs that vary in direct proportion to the volume of activity
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