differential costa future cost that differs between any two alternatives.differential revenuefuture revenue that differs between any two alternatives.direct costa cost that can be easily and conveniently traced to a specified cost object.direct laborfactory labor costs that can be easily traced to individual units of product. also called touch labor.direct materialsmaterials that become an integral part of a finished product and whose costs can be conveniently traced to it.discretionary fixed coststhose fixed costs that arise from annual decisions by management to spend on certain fixed cost items, such as advertising and research.financial accountingthe phase of accounting that is concerned with reporting historical financial information to external parties, such as stockholders, creditors, and regulators.fixed costa cost that remains constant, in total, regardless of changes in the level of activity within the relevant range. if a fixed cost is expressed on a per unit basis, it varies inversely with the level of activity.finished goodsunits of product that have been completed but not yet sold to customers.incremental costan increase in cost between two alternatives.indirect costa cost that cannot be easily and conveniently traced to a specified cost object.indirect laborthe labor costs of janitors, supervisors, materials handlers, and other factory workers that cannot be conveniently traced to particular products.indirect materialssmall items of material such as glue and nails that may be an integral part of a finished product, but whose costs cannot be easily or conveniently traced to it.inventoriable costssynonym for product costs.managerial accountingthe phase of accounting that is concerned with providing information to managers for use within the organization.manufacturing overheadall manufacturing costs except direct materials and direct labor.mixed costa cost that contains both variable and fixed cost elements.opportunity costthe potential benefit that is given up when one alternative is selected over another.period costscosts that are taken directly to the income statement as expenses in the period in which they are incurred or accrued.prime costdirect materials cost plus direct labor cost.product costsall costs that are involved in acquiring or making a product. In the case of manufactured goods, these costs consist of direct materials, direct labor, and manufacturing overhead. also see inventoriable costs.raw materialsany materials that go into the final product.relevant benefita benefit that should be considered when making decisions.relevant costa cost that should be considered when making decisions.relevant rangethe range of activity within which assumptions about variable and fixed cost behavior are valid.selling costsall costs that are incurred to secure customer orders and get the finished product or service into the hands of the customer.sunk costa cost that has already been incurred and that cannot be changed by any decision made now or in the future.variable costa cost that varies, in total, in direct proportion to changes in the level of activity. a variable cost is constant per unit.work in processunits of product that are only partially complete and will require further work before they are ready for sale to the customer.
