Key Words Flashcards
Integrity
Ethical principle requiring accounting staff to be straightforward and honest in all professional and business relationships.
Cost Unit
Unit of output to which costs can be charged.
Responsibility Centre
Segment of a business for which a manager is accountable for, they compare costs and revenues to budget.
Cost Centre
Segment of a business to which costs can be charged.
Profit Centre
Segment of a business to which costs can be charged, revenue can be identified, and profit can be calculated.
Investment Centre
Segment of a business where profit is compared with the amount of money invested in the centre.
Material Costs
The costs of raw materials, components and other goods used.
Labour Costs
The costs of employees’ wages and salaries.
Expenses
Other costs, which cannot be included in ‘materials’ or ‘labour’.
Direct Cost
A cost that can be identified directly with each unit of output.
Indirect Cost (Overhead)
A cost that cannot be identified directly with each unit of output.
Prime Cost (Direct Cost)
The total of all direct costs.
Fixed Costs
Costs which remain fixed over a range of output levels.
Semi-Variable Costs
Costs which combine a fixed and variable element.
Variable Costs
Costs which vary directly with output.
