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PSU ACCTG 211 Exam 5 Terms Flashcards _ (DETAILED ANSWERS) 2024 - DISTINCTION GUARANTEED.pdf
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PSU ACCTG 211 Exam 5 Terms Flashcards _ (DETAILED ANSWERS) 2024 - DISTINCTION GUARANTEED.pdf
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8/9/24, 6:46 AMPSU ACCTG 211 Exam 5 Terms
Jeremiah
Terms in this set (33)
Incremental Revenues the additional revenues from selecting a certain course of action over another
Incremental Costs the additional costs from selecting a certain course of action
Incremental Income incremental revenues minus incremental costs
arises from a past decision and cannot be avoided or changed; it's irrelevant to current
Sunk Costs
and future decisions
Out of Pocket Costs requires a future outlay of cash and is relevant for decisions
Opportunity Costs the potential benefit lost by taking an action instead of an alternative action
Avoidable Costs a cost that can be eliminated by choosing one action versus another; is always relevant
Outsourcing buying goods or services from an external supplier
eliminated when the segment is eliminated; they include all variable costs and direct
Avoidable Costs (elimination) fixed costs such as rent on that segment's space and insurance on that segment
eliminated equipment
remain even if the segment is eliminated; these costs are allocated to remaining
Unavoidable Costs
segments when a segment is eliminated
Price Setters have more control over setting prices; use more cost-plus pricing methods
Price Takers have less control over setting prices; use more target pricing
Total Costs Product costs + SGA costs
Total cost per unit Total costs / Units expected to be produced and sold
Markup Per Unit total cost per unit x markup percentage
Selling Price Per Unit total cost per unit + markup per unit
Target Cost expected selling price - target profit
Markup Percentage (target profit +total fixed costs) / total variable costs
the process of analyzing alternative long-term investments and deciding which assets
Capital Budgeting
to acquire or sell
Payback amount of time it takes to recover the initial capital investment
Equal Cash Flows PBP cost of investment / expected annual net cash flows
PSU ACCTG 211 Exam 5 Terms
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