Cost Definition An amount that has to be paidor given upin order to get something. In business, cost is usually a monetaryvaluation of (1) effort, (2) material, (3) resources, (4) time and utilities consumed, (5) risksincurred, and (6) opportunityforgone in productionand deliveryof a good or service. Allexpensesare costs, but not all costs (such as those incurred in acquisitionof an income-gene rating asset) are expenses. output Definitions (3) 1. The amount ofenergy , work, goods , or servicesproduced by a machine, factory , company , or an individualin a period . 2. Computing : A result produced by a computer that isinternal to the system(from one programor processto another) or external to it (from a program or process to anoutput device ) but internal to an output device (modem,monitor, printer , etc.). 3. Contracting: The desired result from a projectorcontractor. sales revenue Definition The amount realized from sellinggoodsor services in the normal operationsof a companyin a specified period . depreciation Definitions (4) 1. Accounting: The gradualconversion of the cost of a tangible capital asset or fixed asset into an operational expense(called depreciation expense ) over the asset'sestimated useful life. The objectives ofcomputingdepreciation are to (1) reflect reduction in the book value of the asset due to obsolescence or wear and tear, (2) spreada large expenditure(purchasepriceof the asset) proportionat ely
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4. Law: Right of a joint debtor (or joint tortfeasor) who pays entirely
a debt (or liability) to recover from other joint debtors (or joint tortfeasors)
their individual shares of the debt (or liability).
Fixed Cost Definition:
A 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 unitbasis, it varies inversely with the level of activity.
Variable Cost Definition:
Variable cost is a cost that varies, in total, in direct proportion to changes in thelevel of activity. A variable
Income Statement Definition:
Income statement is the summary of a management's performance as reflectedin the profitability (or lack of it) of a firm over a certain period. It itemizesthe revenues and expenses of past that led to the current profit or loss, and
indicates what may be done to improve the results. In contrast to a balance sheet(which is a 'still photograph' taken at a certain time) an income statement is a
'movie' that depicts what happened over a month, quarter, or year. It is based ona fundamental accounting equation (Income = Revenue - Expenses) and showsthe rate at which the owners equity is changing for better or worse. Alongwith balance sheet and cash flow statement it forms the basic set of financialinformation required to manage a firm. Also called earnings report, operatingstatement, or profit and loss account.
Break-even
Break-even (or break even) is a point where any difference between plus or minus or
equivalent changes side.
A technique for which identifying the point where the total revenue is just sufficient to
cover the total cost. The formula for break even point is fixed costs/fixed expense
over contribution per unit. In economics & business, specifically cost accounting,
the break-even point (BEP) is the point at which cost or expenses and revenue are
equal: there is no net loss or gain, and one has "broken even". A profit or a loss
has not been made, although opportunity costs have been paid, and capital has
received the risk-adjusted, expected return, break even point)
Break Even Point Definition:
Break even point is defined as the level of sales at which profit is zero. Thebreak-even point can also be defined as the point where sales total equals total
expenses or as the point where total contribution margin equals total fixedexpenses.
Direct Materials Definition:
Those materials that become an integral part of a finished product and can beconveniently traced into it.
Direct Labor Definition:
Direct labor costs are those factory labor costs that can be easily traced toindividual units of product. Also called touch labor.
Cost of Goods Sold (COGS) Definition:• Cost of goods sold, COGS, or "cost of sales", includes the direct costs
attributable to the production of the goods sold by a company.
• Figure representing the cost of buying raw materials and producingfinished goods.
• The amount paid for the goods sold during an accounting period.
• The total cost of purchasing raw materials and manufacturing finished
goods. Equal to the beginning inventory plus the cost of goods purchasedduring some period minus the ending inventory.
• Determined for the period by counting the merchandise left at the end of the period (physical inventory) and subtracting its cost from the total cost
of merchandise available for sale.• the total cost to the business of the goods sold during
an accounting period. In its simplest form this is the sum of theopening stock plus all purchases less the closing stock.
Income Statement Definition:
Income statement is the summary of a management's performance as reflectedin the profitability (or lack of it) of a firm over a certain period. It itemizes therevenues and expenses of past that led to the current profit or loss, and indicateswhat may be done to improve the results. In contrast to a balance sheet (which is
a 'still photograph' taken at a certain time) an income statement is a 'movie' thatdepicts what happened over a month, quarter, or year. It is based on afundamental accounting equation (Income = Revenue - Expenses) and shows therate at which the owners equity is changing for better or worse. Along with
balance sheet and cash flow statement it forms the basic set of financialinformation required to manage a firm. Also called earnings report, operating
statement, or profit and loss account.
Job Order Costing System Definition:
A costing system used in situations where many different products, jobs, or
Someone who works with and through other people by coordinating their workactivities in order to accomplish organizational goals.
OR
One who handles, controls, or directs, especially:
• One who directs a business or other enterprise.
• One who controls resources and expenditures, as of a household.
OR
One who is in charge of the business affairs of an entertainer.
Management Definition:
Coordinating work activities so that they are completed efficiently andeffectively with and through other people.
Activity-based costing (ABC)
Definition:A costing method based on activities that is designed to provide managers withcost information for strategic and other decisions that potentially affect capacityand therefore fixed costs.