chapter 5: Cost behavior: Analysis and Use

18 cards


 
  
Created Jun 13, 2011
by
katchung

 

 
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1
Account analysis
 
a metiod for analyzing cost behavior in which an account is classified as wither VC or FC based...
2
activity base
 
a measure of whatever causes the incurrence of a VC.
3
committed fixed costs
 
investments in facilities, equipment, and basic organizational structure that can't be significantly...
4
contribution approach
 
an income statement format that organizes costs by their behavior.  costs are separated...
5
contribution margin
 
the amount remaining from sales revenues after all variable expenses have been deducted
6
cost structure
 
the relative proportion of fixed, variable, and mixed costs in an organization
7
dependent variable
 
a variable that responds to some casual factor; total cost is the dependent variable, as represented...
8
discretionary fixed costs
 
those FC that arise from annual decisions by management to spend on certain FC items, such...
9
engineering approach
 
a detailed analysis of cost behavior based on an industrial engineer's evaluation of the inputs...
10
high-low method
 
a method of separating a mixed cost into its FC and VC elements by analyzing the change in...
11
independent variable
 
a variable that acts as a casual factor; activity is the independent variable as represented...
12
least-squares regression method
 
a method of separating a mixed cost into its fixed and variable elements by fitting a regression...
13
linear cost behavior
 
cost behavior is said to be linear whenever a straight line is a reasonable approximation for...
14
mixed cost
 
a cost that contains both VC and FC elements
15
Multiple regression
 
an analytical method required when variations in a dependent variabble are caused by more than...
16
R2 (R squared)
 
a measure of goodness of fit in least-squares regression analysis.  it is the percentage...
17
relevant range
 
the range of activity within which assumptions about VC and FC behavior are reasonably valid
18
step-variable cost
 
the cost of a resource that is obtained in large chunks and that increases and decreases only...

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