Ch 3 Vocab - Operating Process: Planning and Control
Ch 4 Vocab -
Short Term Decision Making
Levels of Cost Behavior
FOB Destination vs Shipping Point
Equations
100
a cost that does not change in total as the amount of the activity driver changes throughout the relevant range.
What is fixed cost?
100
The cost of materials that are directly traceable to the product and that are costly enough to warrant tracing them
What is Direct materials?
100
a cost that varies with the number of units
What is unit-related costs?
100
a situation where legal title to goods passes to the customer when the goods are picked up by the common carrier
What is FOB Shipping Point?
100
(Selling Price - Variable Costs)
What is Contribution Margin?
200
Discounts offered to induce customers to pay their bills early (buyer’s perspective)
What is Purchase Discounts?
200
The cost of employees who manufacture the product
What is Direct labor?
200
a cost incurred to maintain the company’s capacity to operate
What is facility-sustaining costs?
200
a situation where legal title to goods passes to the customer when the goods are received
What is FOB Destination?
200
Contribution Margin / Selling Price
What is Contribution Margin Ratio?
300
Discounts given to unhappy customers
What is Sales Allowance?
300
Production materials that either cannot be traced to the product or are not costly enough to warrant for tracing
What is Indirect materials?
300
a cost that varies with the number of batches regardless of how many units are in each batch
What is batch-related costs?
300
A shipping agreement between the business and the common carrier
What is Bill of Lading?
300
Y = a + (b x X); Y = dollars a = intercept b = slope x = activity
What is cost estimation equation?
400
Goods returned to the seller by the buyer (buyer’s perspective)
What is Purchase Returns?
400
The cost of production employees who do not physically manufacture the product (i.e. quality-control, sanitation, etc.)
What is Indirect labor?
400
a cost that varies with the number of product lines
What is product-sustaining costs?
400
On December 20, 2013, Parker company ships merchandise by common carrier to Jackson, Inc. On December 30, 2013, Jackson, Inc., receives the merchandise and takes legal title. (FOB Destination/Shipping point?)
What is (an example of) FOB Destination?
400
(Selling Price x Quantity)-(Variable Cost x Quantity) - FC = 0
What is breakeven point?
500
Adjustments made to machines to get them ready to manufacture the next type of product
What is Machine Setups?
500
All costs incurred to manufacture products other than direct materials and direct labor.
What is Manufacturing overhead?
500
a cost or revenue that will occur in the future and that differs among the alternatives considered.
What is relevant variable?
500
On April 10, 2013, Wolfe Company ships merchandise by common carrier to Audio Midwest Company. On April 20, 2013, Audio Midwest Company receives the merchandise. The legal title is passed on April 10, 2013. (FOB Destination/Shipping Point?)
What is (an example of) FOB Shipping Point?
500
Price per Unit × Break-even Sales Units OR; Fixed Cost / Contribution Margin
What is breakeven point in dollars?
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