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Cost Volume Profit (CVP) Consideration in Choosing a Cost Structure: Definition and Explanation of Cost Structure: Cost structure refers to the relative proportion of fixed and variable costs in an…
Cost Reconciliation Definition: Cost reconciliation is the part of a production report that shows what costs a department has to account for during a period and how those costs are…
Adjusting Materials Ledger Cards and Accounts to Conform to Inventory Accounts - Inventory Valuation When the inventory count differs from the balance on the materials ledger card, the ledger card…
Adjusted R2 Definition Adjusted r2 is a measure of goodness of fit in least-squares regression analysis. It is the percentage of the variation in the dependent variable that is explained…
Incremental Cost Definition: Incremental cost is defined as an increase in cost between two alternatives. Also see Differential cost.
Addition of Materials - Increase in Unit Cost Learning Objective: What is the effect on the calculation in the preparation of a cost of production report when materials are added…
Cost or Market Whichever is Lower--Inventory Valuation: American costing tradition follows the practice of pricing year-end inventories at cost or market, whichever is lower (lower of cost or market). This…
Incremental Analysis Definition: Incremental analysis is an analytical approach that focuses only on those items of revenue, cost, and volume that will change as a result of a decision. Y…
Beginning Work in Process Inventories Average Costing Method: When beginning work in process inventory costs are merged with costs of the new period, the problem is essentially one of securing…
Income Tax and Capital Budgeting Decisions: Learning Objectives: Include income taxes in a capital budgeting analysis. In our discussion of capital budgeting decisions in this chapter, we ignored income taxes…
Beginning Work in Process Inventories First In First Out (FIFO) Costing Method: It is possible to keep beginning work in process inventory costs separate rather than average them in with…
Addition of Materials - Increase in Units and Change in Unit Cost Learning Objective: What is the effect on the calculation in the cost of production report when materials are…
Income Statement Definition: Income statement is the summary of a management's performance as reflected in the profitability (or lack of it) of a firm over a certain period. It itemizes…
Income Comparison of Variable and Absorption Costing: Learning Objectives: Prepare income statements using variable costing and absorption costing. Why net operating income usually different under variable and absorption costing methods?…
Cost of Production Report (CPR): Definition and Explanation of Cost of Production Report (CPR): A departmental cost of production report (CPR) shows all costs chargeable to a department. It is…
Income and Expenditure Account: Learning Objectives: Define and explain income and expenditure account. What is the purpose of preparing income and expenditure account? Example and format of Income and expenditure account…
Activity Measure Definition An allocation base in an activity-based costing system; ideally, a measure of the amount of activity that drives the costs in an activity cost pool.
Cost of Goods Sold (COGS) Definition: Cost of goods sold, COGS, or "cost of sales", includes the direct costs attributable to the production of the goods sold by a company.…
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