Set: Cost Accounting--Ch.5 Vocab

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All 13 Terms

Term Definition
Activity an event, task, or unit of work with a specified purpose
Activity-based Costing (ABC) approach to costing that focuses on individual activities as the fundamental cost objects. It uses the costs of these activities as the basis for assigning costs to other cost objects such as products or services
Activity-based Management (ABM) method of management decision making that uses activity-based costing information to improve customer satisfaction and profitability
Batch-level Costs the costs of activities related to a group of units of products or services rather than to each individual unit of product or service
Cost Hierarchy categorization of indirect costs into different costs pools on the basis of the different types of cost drivers, or cost-allocation bases, or different degrees of difficulty in determining cause and effect relationships
Facility-sustaining costs the costs of activities that cannot be traced to individual products or services but support the organization as a whole
Output unit-level costs the costs of activities performed on each individual unit of a product or service
Product-cost cross-subsidization costing outcome where one undercosted (overcosted) product results in at least one other product being overcosted (undercosted)
Product overcosting a product consumes a low level of resources but is reported to have a high cost per unit
Product-sustaining costs the cost of activities undertaken to support individual products regardless of the number of units or batches in which the units are produced
Product undercosting a product consumes a high level of resources but is reported to have a low cost per unit
Refined costing system costing system that reduces the use of broad averages for assigning the cost of resources to cost objects (jobs, products, services) and provides better measurement of the costs of indirect resources used by different cost objects--no matter how differently the different cost objects use indirect resources
Service-sustaining costs the costs of activities undertaken to support individual services

Set Information

Terms 13
Creator Steve_Heizmann
Created July 17, 2007
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Steve_Heizmann : Changed Product-cross cross-subsidization → costing outcome where one undercosted (overcosted) product results in at least one other product being overcosted (undercosted) to Product-cost cross-subsidization → costing outcome where one undercosted (overcosted) product results in at least one other product being overcosted (undercosted)
Last Message: 13 months ago

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Most Missed Words

  1. Product-sustaining costs → the cost of activities undertaken to support individual products regardless of the number of units or batches in which the units are produced - 3 misses
  2. Activity-based Management (ABM) → method of management decision making that uses activity-based costing information to improve customer satisfaction and profitability - 2 misses
  3. Cost Hierarchy → categorization of indirect costs into different costs pools on the basis of the different types of cost drivers, or cost-allocation bases, or different degrees of difficulty in determining cause and effect relationships - 2 misses
  4. Facility-sustaining costs → the costs of activities that cannot be traced to individual products or services but support the organization as a whole - 2 misses
  5. Output unit-level costs → the costs of activities performed on each individual unit of a product or service - 2 misses
  6. Product-cost cross-subsidization → costing outcome where one undercosted (overcosted) product results in at least one other product being overcosted (undercosted) - 2 misses
  7. Product overcosting → a product consumes a low level of resources but is reported to have a high cost per unit - 2 misses