Managerial Accounting is defined as the measuring, analyzing the business transactions for organizations goal. Managerial accounting helps the manager to take decision within the organization. Managerial accounting is the combination of both financial and non-financial decisions making information’s to managers.
Variable Cost Definition: Variable cost is a cost that varies, in total, in direct proportion to changes in the level of activity. A variable cost is constant per unit.
Planning Definition: Selecting a course of action and specifying how the action will be implemented.
Retainer Fee Approach Definition: A method of allocating service department costs in which other departments are charged a flat amount each period regardless of usage of the service involved.
Responsibility Center Definition: Any business segment whose manager has control over cost, revenue, or the use of investment funds.
Planning and Control Cycle Definition: The flow of management activities through planning, directing and motivating, and controlling, and then back to planning again.
Responsibility Accounting Definition: A system of accountability in which managers are held responsible for those items of revenue and cost – and only those items – over which the manager can exert significant control. The managers are held responsible for differences between budgeted and
Residual Income Definition: The net operating income that an investment center earns above the required return on its operating assets.
Profit Center Definition: A business segment whose manager has control over cost and revenue but has no control over the use of investment funds.
Required Rate of Return Definition: The minimum rate of return that an investment project must yield to be acceptable.
Replacement Cost Method Definition: Replacement cost is the cost at which, on the date of issue of the material, there could be purchased another lot of material identical to that whose issue is being priced. Under replacement cost method, the issues are priced at
Relevant Cost Definition: A cost that differs between alternatives in a particular decision. In managerial accounting, this term is synonymous with avoidable cost and differential cost.
Relevant Range Definition: The range of activity within which assumptions about variable and fixed cost behavior are valid.
Relaxing (Elevating) the Constraint Definition: An action that increases the capacity of a bottleneck. As a result constraint give some relaxation and productivity or provision of services to customers are increased to some extent. This relaxation my transfer the term “constraint” to another resource.
Regression Line Definition: A line fitted to an array of plotted points. The slope of the line, denoted by the letter b in the linear equation Y = a + bX, represents the average variable cost per unit of activity. The point where the
Value Chain Definition: The major business functions that add value to a company’s products and services. These functions consist of research and development, product design, manufacturing, marketing, distribution, and customer service.
Reconciliation Method Definition: A method of computing the cash provided by operating activities that starts with net income and adjusts it to a cash basis. It is also known as the indirect method.
Top Managers Definition: Managers at or near the top level of the organization who are responsible for making organization-wide decisions and establishing the goal and plans that effect the entire organization.
Reciprocal Services Definition: Services provided between service departments. Also see Interdepartmental services.