Cost Accounting Terms and Contracts, Quizzes of Management Accounting

Download Cost Accounting Terms and Contracts and more Quizzes Management Accounting in PDF only on Docsity! TERM 1 Fair Price DEFINITION 1 The lowest price that ensures a continuous supply of the proper quality where and when needed. TERM 2 Direct Costs DEFINITION 2 Costs that can be specifically and accurately assigned to a given unit of production. TERM 3 Indirect Costs DEFINITION 3 Costs that are incurred in the operation of a production plant or process, but normally cannot be related directly to any given unit of production.EXS: rent, property taxes, machine depreciation, expenses of general supervisors, data processing, power, heat, and light. TERM 4 Variable Costs DEFINITION 4 Costs that vary directly and proportionally with the units produced. TERM 5 Semivariable Costs DEFINITION 5 Costs that may vary with the number of units produced but are partly variable and partly fixed. TERM 6 Fixed Costs DEFINITION 6 Costs that generally remain the same regardless of the number of units produced. TERM 7 Costs DEFINITION 7 Dollars and cents per unit based on an average cost for raw material over a period of time, direct labor costs, and an estimated volume of production over a period of time on which the distribution of overhead is based. TERM 8 The Cost Approach DEFINITION 8 Price is a certain amount over direct costs, allowing for sufficient contribution to cover indirect costs and overhead and leaving a certain margin for profit. TERM 9 The Market Approach DEFINITION 9 Prices are set in the marketplace and may not be directly related to cost. TERM 10 Government Influence on Pricing DEFINITION 10 Controls such as quotas, tariffs, and export permits.