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13 Cards in this Set

  • Front
  • Back
Differential Cost (Revenue)
The difference in total cost or revenue between ttwo alternatives
Incremental Cost
Another term for differntial cost when one alternative includes all the costs of the other plus some additional costs
Outlay Cost
A cost that requires a future cash disbursement
Opportunity Cost
The maximum available contribution to profit forgone (or passed up) by using limited resources for a particular purpose
Joint Products
Two or more manufactured products that (1) have relatively significant sales values and (2) are not separately identifiable as individual products until their split-off point
Separable Costs
Any cost beyond the split-off point
Joint Costs
The costs of manufacturing joint products prior to the split-off point
The periodic cost of equipment that a company spreads over the future periods in which the company will use the equipment
Book Value (Net Book Value)
The original cost of equipment less accumulated depreciation
Accumulated Depreciation
The sum of all depreciaiton charged to past periods
Sunk Cost
A historical or past cost, that is, aa cost that the company has already incurred and, therefore, is irrelevant to the decision-making process
Absorption Approach
A costing approach that considers all indirect manufacturing costs (both variable and fixed) to be product (inventoriable) costs that become an expense in the form of manufacturing costs of goods sold only as sales occur
Contribution Approach
A method of internal (managerial accounting) reporting that emphasized the distinction between variable and fixed costs for the purpose of better decision making