Interne

Actual cost

cost incurred (historical, past cost)

Budgeted cost

predicted or forecasted cost

Variances

difference between actual and budgeted/standard costs

Direct cost

related to the particular cost object and can be traced to it in an easy and convenient way

Indirect costs = overhead

related to the particular cost object but cannot be traced to it in an economically feasible (cost-effective) way

Need to be allocated to the cost object

Cost driver

the activities that cause costs to be incurred

cost behavior

relationship of various costs to the activities performed

Variable costs

Changes in total in direct proportion to a change in the level of activity/cost driver

Fixed costs

Remains unchanged in total as the level of activity/cost driver changes

Product costs

assigned to goods that were either purchased or manufactured for resale (= inventoriable)

Period costs

all other costs, associated with the period in which they are incurred

Unit costs

average costs (total divided by # units)

Contribution Margin (CM)

= Revenues – Variable Cost (VC)

= CMu x Q

Contribution Margin per unit (CMu)

= Unit Selling Price (SP) – VCu

Contribution Margin Ratio (%)

CMu / unit Selling Price (SP)

breakeven point

CM - FC = 0

CM = FC

Breakeven Quantity (BEQ)

FC/ Cmu

Target profit Q(TOI)

(FC + TOI) / CMu

after tax profit TNI

= TOI – t*TOI

= (1-t)*TOI

target profit (TOI)

TNI/(1-t)

Margin of safety (mos)

budgeted sales - breakeven sales

MOS Ratio

MOS / budgeted sales

Operating leverage

= contributie marge / operating income

= sales - variabele kosten / contributie marge - fixed cost

weighted-average CM

(CMu 1 Q1) + (CMu 2 + Q2) / Q1 + Q2