Module 1

Activity Index

A measure of whatever causes the incurrence of a variable cost.

Conversion Costs

The sum of direct labor and manufacturing overhead costs.

Cost

The value of everything a company uses up to produce a product or service.

Cost Behaviour Analysis

The study of how specific costs respond to changes in the level of business activity.

Cost Object

Any item for which costs are measured and assigned.

Cost of Goods Manufactured

The total cost of making and finishing a product, including direct materials, direct labor, and manufacturing overhead.

Cost of Goods Purchased

The total cost of buying and delivering materials to be used in manufacturing a product.

Direct Labour

The cost of wages for workers who are directly involved in the production of goods.

Direct Materials

The raw materials that are traceable directly to the finished product.

Ending Work in Process Inventory

The costs associated with the partially completed goods that are still on the production floor at the end of a period.

Fixed Costs

Costs that do not change with the level of production or sales.

High Low Method

A method to separate mixed costs into fixed and variable components using the highest and lowest activity levels.

Indirect Labour

Labor costs that cannot be traced directly to specific products or services.

Indirect Materials

Materials that cannot be traced directly to specific products or services.

Manufacturing Overhead

All manufacturing costs that are not direct materials or direct labor.

Mixed Costs

Costs that have both a fixed and a variable component.

Period Costs

Costs that are expensed in the period in which they are incurred and are not included in the cost of manufactured goods.

Prime Costs

The sum of direct materials and direct labor costs.

Product Costs

Costs that are a necessary and integral part of producing the finished product.

Regression Analysis

A statistical method used to estimate the relationships among variables.

Relevant Range

The range of activity within which assumptions about variable and fixed cost behavior are valid.

Total Cost of Work in Process

The sum of the costs of the beginning work in process inventory and the total manufacturing costs for the current period.

Total Manufacturing Costs

The sum of direct materials, direct labor, and manufacturing overhead incurred in a period.

Variable Costs

Costs that vary directly with the level of production.

Activity-Based Costing (ABC)

A costing method that assigns overhead and indirect costs to related products and services.

Balanced Scorecard

A performance measurement framework that includes financial and non-financial metrics.

Board of Directors

A group of individuals elected to represent shareholders and oversee the activities of a company.

Chief Executive Officer (CEO)

The highest-ranking executive in a company, responsible for overall operations and performance.

Chief Financial Officer (CFO)

The senior executive responsible for managing the financial actions of a company.

Controller

The officer responsible for all accounting-related activities within an organization.

Corporate Social Responsibility (CSR)

A company's commitment to manage the social, environmental, and economic effects of its operations responsibly.

Data Analytics

The process of examining data sets to draw conclusions about the information they contain.

Data Visualization

The graphical representation of information and data to help understand trends, outliers, and patterns.

Enterprise Resource Planning (ERP) Software System

Integrated management software that allows organizations to use a system of integrated applications to manage the business and automate many back

Just-In-Time (JIT) Inventory

An inventory management system where materials are only ordered and received as they are needed in the production process.

Line Positions

Jobs that are directly involved in the company's core business operations.

Managerial Accounting

The process of identifying, measuring, analyzing, and communicating financial information to managers for achieving business goals.

Staff Positions

Jobs that support and assist line positions but are not directly involved in core business operations.

Supply Chain

The network of all the individuals, organizations, resources, activities, and technology involved in the creation and sale of a product.

Theory of Constraints

A methodology for identifying the most important limiting factor (constraint) that stands in the way of achieving a goal and then systematically improving that constraint.

Total Quality Management (TQM)

An organization-wide approach to continuous improvement and ensuring quality in all processes.

Treasurer

The corporate officer responsible for managing the company's finances, including financial planning, management of financial risks, record

Triple Bottom Line

An accounting framework that includes social, environmental, and financial performance metrics.

Value Chain

The series of steps a company takes to transform raw materials into a final product that is delivered to the customer.

direct materials
direct labour
manufacturing overhead

The three classes of manufacturing costs are ______ _________, ______ ______, _____________ ________