Term
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Definition
| an event, task, or unit of work with a specified purpose |
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Term
| Activity-based costing (ABC) |
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Definition
| approach to costing that focuses on individual activities as the fundamental cost objects. It uses the costs of these activities as the basis for assigning costs to other cost objects such as products or services |
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Term
| Activity-based management (ABM) |
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Definition
| method of management decision-making that uses activity-based costing information to improve customer satisfaction and profitability |
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Term
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Definition
| the costs of activities related to a group of units of products or services rather than to each individual unit of product or service |
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Term
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Definition
| categorization of indirect costs into different cost pools on the basis of the different types of cost drivers, or cost-allocation bases or different degrees of difficulty in determining cause-and-effect (or benefits received) relationships |
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Term
| Facility-sustaining costs |
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Definition
| the costs of activities that cannot be traced to individual products or services but support the organization as a whole |
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Term
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Definition
| costs the costs of activities performed on each individual unit of a product or service |
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Term
| Product-costs cross-subsidization |
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Definition
| costing outcome where one undercosted (overcosted) product results in at least one other product being overcosted (undercosted) |
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Term
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Definition
| a product consumes a low level of resources but is reported to have a high cost per unit |
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Term
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Definition
| the costs of activities undertaken to support individual products regardless of the number of units or batches in which the units are produced |
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Term
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Definition
| a product consumes a high level of resources but is reported to have a low cost per unit |
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Term
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Definition
| costing system that reduces the use of broad averages for assigning the cost of resources to cost objects (jobs, products, services) and provides better measurement of the costs of indirect resources used by different cost objects- no matter how differently various cost objects use indirect resources |
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Term
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Definition
| the costs of activities undertaken to support individual services |
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