Chapter 3 vocab Flashcards
Activity Drivers
Bases that reflect the consumption or provision of resources
Bill of lading
A shipment agreement between the business and the common carrier
Conversion process
A series of interrelated activities designed to produce the goods a company sells
Cost behavior
How a cost reacts to a change in the level of operating activity
Dependent variable (appendix)
A variable that depends on another variable
Expenditure process
A series of interrelated activities designed to enable the company to generate revenue
Fixed cost
A cost that does not change in total as the amount of activity driver changes throughout the relevant range
Fixed revenue
A revenue that does not change as the total as the amount of the activity driver changes throughout the relevant range
Free on board (FOB) destination
A situation where title goods passes to the customer when goods are received
Free on board (FOB) destination
A situation where legal title passes to the customer where goods are received
Free on board (FOB) shipping point
A situation where legal title to goods passes to the customer when the goods are picked up by the common carrier CHECK
Independent variable (appendix)
A variable that does not depend on another variable
Manufacturing overhead
The cost of all manufacturing resources used to make products that are not directly associated with production
Mixed cost
A cost that varies, but not proportionally, to a change in activity throughout the relevant range
Mixed cost
A cost that varies, but not proportionally, to a change in activity throughout the relevant range
Mixed revenue
A revenue that varies but not proportionally to a change in activity throughout the relevant range
Purchase allowances
Discounts given to unhappy customers (buyers perspective)
Purchase discounts
Discounts offered to induce customers to pay their bills early (buyers perspective)
Purchase order
A document sent from a buyer to a vendor to request items for purchase
Purchase requisition
A document used by an internal party to communicate their needs to the purchasing manager
Purchase returns
Goods returned to the seller by the buyer (buyers perspective)
Purchase returns
Goods returned to the seller by the buyer (buyers perspective)
Relevant range
The span of operating activity that is considered normal for the company
Revenue behavior
How a revenue reacts to change in the level of operating activity
Revenue process
A series of interrelated activities designed to produce revenue
Sales allowances
Discounts given to unhappy customers (sellers perspective)
Sales allowances
Discounts given to unhappy customers (sellers perspective)
Sales discounts
Discounts offered to induce customers to pay their bills early (sellers perspective)
Sales discounts
Discounts offered to induce customers to pay their bills early (sellers perspective)
Sales invoice
A document sent from a seller to a customer as a bill
Sales returns
Goods returned to the seller by the buyers (sellers perspective)
Variable cost
A cost that changes in direct proportion to the change in the amount of activity driver throughout the relevant range
Variable revenue
A revenue that changes in direct proportion to the change in the amount of activity driver throughout the relevant range
X variable (appendix)
See independent variable
Y variable (appendix)
See dependent variable
