Activity Base - ANSWER-a measure of whatever causes the incurrence of a variable cost
Activity Base (example) - ANSWER-The total cost of surgical gloves in a hospital will increase as the
number if surgeries increases. Therefore, the number of surgeries is the activity base that explains the
tot...
ACCT 2210 Exam Questions |Already
Answered | Graded A+
Activity Base - ANSWER-a measure of whatever causes the incurrence of a variable cost
Activity Base (example) - ANSWER-The total cost of surgical gloves in a hospital will increase as the
number if surgeries increases. Therefore, the number of surgeries is the activity base that explains the
total cost of surgical gloves
Administrative Costs - ANSWER-All executive, organizational, and clerical costs associated with the
general management of an organization rather that manufacturing or selling
Committed fixed costs - ANSWER-investments, equipment, and basic organizational structure that cant
be significantly reduced even for a short period of time without making fundamental changes
common cost - ANSWER-a cost that is incurred to support a number of cost objects but that cannot be
traced to them individually.
Common cost (example) - ANSWER-The Wage cost of the pilot of a 747 airliner is a common cost of all
the passengers on the aircraft. without the pilot, there would be no flight and no passengers. but no
part of the pilots wage is caused by any one passenger taking the flight.
Contribution approach - ANSWER-An income statement format that organizes costs by their behavior.
Costs are separated into variable and fixed categories rather than being separated into product and
period costs for external reporting purposes.
Contribution Margin - ANSWER-The amount remaining from sales revenues after all variable expenses
have been deducted.
Conversion Cost - ANSWER-direct labor cost plus manufacturing overhead cost
cost behavior - ANSWER-the way in which a cost reacts to changes in the level of activity
, Cost object - ANSWER-anything for which cost data are desired
Examples of cost objects - ANSWER-products, customers, geographic regions, and parts of the
organization such as departments or divisions
Cost structure - ANSWER-the relative proportion of fixed, variable, and mixed costs in an organization
Differential cost - ANSWER-a difference in cost between two alternatives
Differential revenue - ANSWER-future revenue that differs between any two alternatives
Direct cost - ANSWER-a cost that can be easily and conveniently traced to a specified cost object
Direct labor - ANSWER-factory labor costs that can be easily traced to individual units of product
Direct labor is also called - ANSWER-Touch labor
Direct Materials - ANSWER-Materials that become an integral part of a finished product and whose costs
can be conveniently traced to it.
Discretionary fixed costs - ANSWER-Those fixed costs that arise from annual decisions by management
to spend on certain fixed cost items, such as advertising and research.
Financial accounting - ANSWER-the phrase of accounting that is concerned with reporting historical
financial information to external parties, such as stockholders, creditors and regulators
Fixed cost - ANSWER-cost that remains constant regardless of changes in the level of activity within the
relevant range.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller lecturervince8. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $13.48. You're not tied to anything after your purchase.
