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11 terms

Ch. 20: Variable Costing for Management Analysis

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absorption costing
the reporting of the costs of manufactured products, normally direct materials, direct labor, and factory overhead, as product costs.
contribution margin
sales less (-) variable costs and variable selling and administrative expenses.
contribution margin analysis
the systematic examination of the differences between planned and actual contribution margins.
controllable costs
Costs that can be influenced (increased, decreased, or eliminated) by someone such as a manager or factory worker.
manufacturing margin
the variable cost of goods sold deducted from sales. Sales (-) VC of goods sold.
market segment
a portion of business that can be assigned to a manger for profit responsibility.
non-controllable cost
Cost that can not be influenced (increased, decreased, or eliminated) by someone such as a manager or factory worker.
quantity factor
the effect of a difference in the number of units sold, assuming no change in unit sales price or unit cost.
sales mix
the relative distribution of sales among the various products available for sale.
variable cost of goods sold
consists of direct materials, direct labor, and variable factory overhead for the units sold.
variable costing
the concept that considers the cost of products manufactured to be composed only of those manufacturing costs that increase or decrease as the volume of production rises or falls (direct materials, direct labor, and variable factory overhead).