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19 Cards in this Set
- Front
- Back
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Fixed expense that can’t be directly traced to individual segments and is unaffected by the elimination of any segment |
Common fixed expense |
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Mathematical expression that expresses resource limits |
Constraints |
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Specific set of procedures that produces a decision when followed |
Decision model |
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Difference in TC b/t alternatives in decision |
Differential cost |
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Fixed cost that is directly traceable to given segment and is gone when segment is eliminated |
Direct fixed cost |
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Products that are inseparable prior to split-off point; all Manuf costs up to split-off are joint costs |
Joint products |
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Relevant costing analysis that focuses on keeping or dropping segment of business |
Keep-or-drop decision |
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Relevant costing analysis that focuses on whether a component should be made or bought |
Make-or-buy decision |
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Percent applied to base cost; inc. desired prof and any cost not in base cost |
Markup |
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Benefit given up or sacrificed when one alternative is chosen over another |
Opportunity cost |
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Future cost that varies across alternatives |
Relevant cost |
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Company’s subunit that’s of sufficient importance to warrant production of performance reports |
Segment |
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Contribution a segment makes to cover common FC and provide for profit after DFC and VC are deducted from segment revenue |
Segment margin |
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Relevant costing analysis that focuses on whether a product should be processed beyond split-off point |
Sell-or-process-further decision |
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Relevant costing analysis that focuses on whether a specially priced order should be accepted or rejected |
Special-order decision |
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Point at which products become distinguishable after passing through a common process |
Split-off point |
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Costs for which the outlay has already been made and that can’t be affected by future decision |
Sunk cost |
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Difference b/t sales price needed to achieve projected market share and desired per-unit profit |
Target cost |
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Method of determining cost of product or service based on price that customers are willing to pay |
Target costing |
