Cost Accounting--Ch.9 Vocab
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Created by:
Steve_Heizmann on August 2, 2007
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10 terms
Terms | Definitions |
|---|---|
 Absorption Costing | method if inventory costing in which all variable manufacturing costs and all fixed manufacturing costs are included as inventoriable costs |
| Direct Costing | another term for variable costing |
| Downward Demand Spiral | pricing context where prices are raised to spread capacity costs over a smaller number of output units. Continuing reduction in the demand for products that occurs when the prices of competitor's products are not met and, as demand drops further, higher and higher unit costs result in more and more reluctance to meet competitors prices |
| Master-budget Capacity Utilization | the expected level of capacity utilization for the current budget period (typically one year) |
| Normal Capacity Utilization | the level of capacity utilization that satisfies average customer demand of a period (say, 2-3 years) that includes seasonal, cyclical, and trend factors |
| Practical Capacity | the level of capicity that reduces theoretical capacity by unavoidable operating interruptions such as scheduled maintanence time, shutdowns for holidays, and so on. |
| Super-variable Costing | another term for throughput costing |
| Theoretical Capacity | the level of capacity based on producing at full efficiency all the time |
| Throughput Costing | method of inventory costing in which only variable direct material costs are included as inventoriable costs |
| Variable Costing | method of inventory costing in which only all variable manufacturing costs are included as inventoriable costs |
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