Flashcards
Chapter 10 Key Terms
Cards in this deck (20)
- 1Relevant CostingA process that compares to the extent possible and practical the incremental revenues and incremental costs of alternative decisions.
- 2Incremental CostThe cost resulting from the production or sale of an additional contemplated quantity of output.
- 3Incremental RevenueThe revenue resulting from an additional contemplated sales quantity a cost that must be allocated or assigned to products or services because of its non-traceability.
- 4Ad Hoc discounta price concession made under competitive pressure (real or imagined) that does not relate to quantity purchased.
- 5differential costa cost that differs in amount among alternatives being considered.
- 6Differential RevenueA revenue that differs in amount among alternatives being considered.
- 7Linear Programming (LP)A method of mathematical programming used to solve a problem that involves an objective function and multiple limiting factors or constraints.
- 8Make-or-Buy DecisionA decision that compares the cost of internally manufacturing a component of a final product (or providing a service function) with the cost of purchasing it from outside suppliers.
- 9Mathematical ProgrammingA variety of techniques used to allocate limited resources among activities to achieve a specific objective.
- 10OffshoringAn outsourcing of jobs formerly performed in the home country to foreign countries.
- 11Opportunity CostA potential benefit that is forgone because one course of action is chosen over another.
- 12OutsourcingThe use, by one company of an external provider of a service or manufacturer of a component.
- 13Outsourcing DecisionSame as make-or-buy decision
- 14Robinson-Patman ActA law that prohibits companies from pricing the same products at different amounts when those amounts do not reflect related cost differences.
- 15Sales MixThe relative combination of the various products' sales quantities that comprise a company's total sales.
- 16Scarce ResourceA resource that is essential to production activity, but is available only in some limited quantity.
- 17Segment MarginThe excess of revenues over direct variable expenses and avoidable fixed expenses for a particular segment.
- 18Special order DecisionA situation in which management must determine a sales price to charge for manufacturing or service jobs outside the company's normal production/service market.
- 19Sunk CostA cost incurred in the past and not relevant to any future courses of action; the historical or past cost associated with the acquisition of an asset or a resource.
- 20Common ExpensesIs expenses that will be incurred regardless of which product lines the companies has.
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- Key Terms for Chapter 10 Cost Accounting
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