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Capacity ratio |
Actual number of hours worked divided by budgeted standard hours. The ratio is expressed as a percentage |
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Carrying costs |
Costs incurred in keeping stocks such as storage costs, insurance and cost of money tied up in stocks. |
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Common costs |
Also known as joint costs. They are costs incurred prior to the split off point. |
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Continuous budget |
Also known as rolling budget. It is a budget which adds a period in the future as the period just ended is completed. |
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Contract costing |
A costing method which is applied to work that are constructional in nature and takes a long time to complete |
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Contribution |
The difference between the sales value and marginal cost |
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Contribution margin |
This is the margin that results when variable production costs are subtracted from revenue. It is most useful for making incremental pricing decisions where a company must cover its variable costs, though perhaps not all of its fixed costs. |
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Contribution sales ratio |
Contribution divided by sales. It shows the rate at which profit is made. Also referred as profit volume ratio |
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Controllable costs |
Costs that are influenced by decision or action of a manager |
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Control period |
The period in which control is exercised |
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Conversion cost |
The total of direct labor, direct expenses and production overhead |
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Cost allocation |
The assigning or distribution of costs to cost centres |
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Cost apportionment |
Costs applied to cost centres are shared fairly by the cost centres |
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Cost centre |
A section of a business for which costs can be accumulated |
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Cost ledger |
A book in which cost accounts are kept |
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Cost plus pricing |
Prices are set by adding a percentage mark-up for profit to the total cost of the product. |
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Cost sheet |
Also known as cost card or cost statement. It is a basic document for collecting cots of a cost centre or cost unit |
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Cost unit |
The quantitative unit of product or service in relation to which costs can be ascertained. |
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Cost unit rate |
Estimated overheads divided by the number of cost units to be produced |
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Cost driver |
This is a factor that directly impacts the incidence of a cost, and which is generally based on varying levels of activity. |
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Cost object |
This is an item for which a cost is compiled. For example, this can be a product, a service, a project, a customer, or an activity |
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Cost pool |
A cluster of cost items. |
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Costing period |
The period for which costs are ascertained |
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Current standard |
Standard set for use over a short time period and it represents current conditions. |
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