Key Terms: Chapter Twenty-Three
Also known as full costing -- a costing method where inventory absorbs direct costs and variable and fixed factory overhead
An internal report that identifies each segment's controllable elements; the contribution margin, controllable fixed costs, uncontrollable fixed costs, and segment margin
Customized business software that delivers key real time business data in an easily monitored layout
direct method/allocating service cost
An allocation process whereby service department costs are assigned directly to productive departments (compare to step method)
An internal assessment technique that adjusts income for a presumed cost of capital (or other threshold rate of return); operating income - (operating assets X cost of capital)
A business unit for which separate financial information is evaluated by an operating decision maker who allocates resources and judges performance of the unit
step method/allocating service cost
An allocation process whereby some service department costs may be assigned to other service departments as part of a sequential methodology
A costing method where inventory absorbs direct costs and variable factory overhead; the income statement identifies the contribution margin