Listed below are nine technical accounting terms introduced in this chapter:Variable costs Relevant range Contribution marginBreak-even point Fixed costs Semivariable costsEconomies of scale Sales mix Unit contribution marginEach of the following statements may (or may not) describe one of these technical terms. For each statement, indicate the accounting term described, or answer “None” if the statement does not cor-rectly describe any of the terms. a. The level of sales at which revenue exactly equals costs and expenses.b. Costs that remain unchanged despite changes in sales volume.c. The span over which output is likely to vary and assumptions about cost behavior generallyremain valid.d. Sales revenue less variable costs and expenses.e. Unit sales price minus variable cost per unit.f. The reduction in unit cost achieved from a higher level of output.g. Costs that respond to changes in sales volume by less than a proportionate amount.h. Operating income less variable costs.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Listed below are nine technical accounting terms introduced in this chapter:
Variable costs Relevant range Contribution margin
Break-even point Fixed costs Semivariable costs
Economies of scale Sales mix Unit contribution margin
Each of the following statements may (or may not) describe one of these technical terms. For each
statement, indicate the accounting term described, or answer “None” if the statement does not cor-
rectly describe any of the terms.
a. The level of sales at which revenue exactly equals costs and expenses.
b. Costs that remain unchanged despite changes in sales volume.
c. The span over which output is likely to vary and assumptions about cost behavior generally
remain valid.
d. Sales revenue less variable costs and expenses.
e. Unit sales price minus variable cost per unit.
f. The reduction in unit cost achieved from a higher level of output.
g. Costs that respond to changes in sales volume by less than a proportionate amount.
h. Operating income less variable costs.
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