Ch 06 - Variable Costing and Segment Reporting Flashcards Preview

Managerial Acct > Ch 06 - Variable Costing and Segment Reporting > Flashcards

Flashcards in Ch 06 - Variable Costing and Segment Reporting Deck (6):
1

Absorption costing

A costing method that includes all manufacturing costs, direct materials, direct labor, and both variable and fixed manufacturing overhead in unit product costs. (p. 230)

2

Common fixed cost

A fixed cost that supports more than one business segment, but is not traceable in whole or in part to any one of the business segments. (p. 240)

3

Segment

Any part or activity of an organization about which managers seek cost, revenue, or profit data. (p. 230)

4

Segment margin

A segment's contribution margin less its traceable fixed costs. It represents the margin available after a segment has covered all of its own traceable costs. (p. 241)

5

Traceable fixed cost

A fixed cost that is incurred because of the existence of a particular business segment and that would be eliminated if the segment were eliminated. (p. 240)

6

Variable costing

A costing method that includes only the variable portion of manufacturing costs (direct materials, direct labor, and variable manufacturing overhead in unit product costs). (p. 230)