Chapter 4 Flashcards Preview

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Flashcards in Chapter 4 Deck (20):
1

Operation where the work required limits production

Bottleneck

2

Activities, resources, or policies that limit or bound the attainment of an objective

Constraints

3

Contribution margin per unit of a particular input with limited availability

Contribution Margin per unit of Scarce Resource

4

Process of estimating revenues and costs if alternative actions available to decision makers and of comparing these estimates to the status quo

Differential Analysis

5

With two or more alternatives, costs that differ among or between alternatives

Differential Costs

6

Exporting a product to another company at a price below domestic price

Dumping

7

Sum of all costs of manufacturing and selling a unit or product (includes bother fixed and variable costs)

Full Cost

8

Decision concerning whether to make needed goods internally or purchase them from outside sources

Make-or-Buy Decision

9

Practice of setting prices highest when the quantity demanded for the product approached capacity

Peak-Loading Pricing

10

Practice of setting price below cost with the intent to drive competitors out of business

Predatory Pricing

11

Practice of selling identical goods to different customers at different prices

Price Discrimination

12

Agreement among business competitors to set prices at a particular level

Price Fixing

13

Time from initial research and development to the time that support to the customer ends

Product Life Cycle

14

Period of time over which capacity will be unchanged, usually one year

Short Run

15

Order that will not affect other sales and is usually a short-run occurence

Special Order

16

Cost incurred in the past that cannot be changed try present or future decisions

Sunk Cost

17

Equals the target price minus desired profit margin

Target Cost

18

Price based on customers' perceived value for the product nada the price that competitors charge

Target Price

19

Focuses on revenue and cost management when face with bottlenecks

Theory of Constraints (TOC)

20

Sales dollars minus direct materials costs and variables such as energy and piecework labor

Throughput Contribution