Cost-Revenue Analysis for Decision Making FLASHCARDS

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Cost-Revenue Analysis for Decision Making
FLASHCARDS
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Absorption costing
Absorption costing
The accounting procedure whereby all
manufacturing costs, including fixed costs, are
included in the cost of goods manufactured
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Direct costing
Direct costing
The accounting procedure whereby only variable
costs are included in the cost of goods
manufactured, and fixed manufacturing costs are
written off as expenses in the period in which
they are incurred
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Opportunity cost
Opportunity cost
Potential earnings or benefits that are given up
because a certain course of action is taken
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Sunk cost
Sunk cost
A cost that has been incurred and will not change
as a result of a decision
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Marginal income
Marginal income
The manufacturing margin minus variable operating
expenses
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For additional reinforcement of accounting
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