Term
| two stage cost allocation |
|
Definition
| procedure to (1) assign service departments costs to operating departments and (2) operating department costs, including those assigned from service departments, to the organizations output |
|
|
Term
|
Definition
| costs are traced to individual activities and then allocated to cost objects |
|
|
Term
|
Definition
| cost readily traced to a department b/c they are incurred for that department's sole benefit |
|
|
Term
|
Definition
| costs that are incurred for the joint benefit of more than 1 department and cannot be readily traced to one department |
|
|
Term
| preparation of departmental income statements |
|
Definition
(step 1) accumulate direct expenses and its share of indirect expenses
(step 2) allocate indirect expenses across all departments
(step 3) allocate expenses of the service departments to the operating departments |
|
|
Term
|
Definition
| incurs cost without directly generating revenues |
|
|
Term
|
Definition
| incurs costs and generates revenues |
|
|
Term
| departmental contribution to overhead |
|
Definition
| a report of amount of sales minus direct expenses |
|
|
Term
| responsibility accounting |
|
Definition
| manager's performance is evaluated using responsibility accounting reports that describe a department's activities in terms of controllable costs |
|
|
Term
|
Definition
| manager has the power to determine or at least significantly affect the amount incurred |
|
|
