College Accounting-Chapter 3
Review of the terms from Chapter 3.
A cost that changes in direct proportion to the change in activity.
A cost that does not change in total as the amount of activity changes
A cost that varies, but not proportionately, to a change in activity.
A document sent from a buyer to a vendor to request items for purchase.
A document sent from a seller to a customer as a bill.
A document used by an internal party to communicate their needs to the purchasing manager.
A group of machines arranged to reduce travel time of product between machines.
A series of interrelated activities designed to enable the company to generate revenue.
A series of interrelated activities designed to generate revenue.
A series of interrelated activities designed to produce the goods a company sells.
Machine Set Ups
Adjustments made to machines in preparation for new production run.
Basis that reflects the consumption or provision of resources.
Cost of salaries for workers who actually manufacture the product.
Discount given buyer for paying amount due early (buyer's perspective).
Discounts given to unhappy customers by seller (seller's books).
Discounts offered to customers to induce them to pay early (seller's perspective).
Goods returned by buyer on buyer's books.
Goods returned to the seller by the buyer (seller's perspective).
How a cost reacts to change in the level of operating activity.
How revenue reacts to a change in the level of operating activity.
Legal title transfers to customer when goods are received.
FOB Shipping Point
Legal title transfers when goods leave the seller's place of business.
Manufacturing cost not directly associated with the production of a product.
Reduction in price of goods purchased as a result of dissatisfaction by customers (buyer's perspective).
Revenue that changes in direct proportion to the change in activity.
Revenue that changes, but not proportionately, to a change in activity.
Revenue that does not change in total as activity changes.
Bill of Lading
Shipping document that describes agreement between business and common carrier.
The span of operating activity that is considered normal for a company.
Wood used to make furniture.