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.
Cost Object Definition: A cost object is anything for which cost data are desired. Examples of possible cost objects are products, product lines, customers, jobs, and organizational subunits such as departments or divisions of a company.
Horizontal/Trend Analysis Definition: A side-by-side comparison of two or more years’ financial statements. Click here to read full article about horizontal or trend analysis. Relevant terms: Vertical Analysis
Cost Driver Definition: Cost driver is a factor, such as machine-hours, beds occupied, computer time, or flight-hours, that causes overhead costs.
High-Low Point Method Definition: A method of separating a mixed cost into its fixed and variable elements by analyzing the change in cost between the high and low levels of activity.
Half-Year Convention Definition: A requirement under the Modified Accelerated Cost Recovery System (MACRS) that allows a company to take only a half year’s depreciation in the first and last years of an asset’s depreciation period.
Cost Center Definition: A business segment whose manager has control over cost but has no control over revenue or the use of investment funds.
Cost Behavior Definition: Cost behavior is the way in which a cost reacts or responds to changes in the level of business activity.
Cost Accounting Definition: Different authorities have defined the term “cost accounting” which help in reflecting the multi-sided meaning the subject contains. The definition given by J. W. Neuner is considered more satisfactory and concise which is as following: “Cost accounting is an expanded phase
Dependent Variable Definition: A variable that reacts or responds to some causal factor; total cost is the dependent variable, as represented by the letter Y, in the equation: Y = a + bX.
Denominator Activity definition: The activity figure used to compute the predetermined overhead rate.
Delivery Cycle Time Definition: The amount of time required from receipt of an order from a customer to shipment of the completed goods.
Conversion Cost Definition: Conversion cost is equal to direct labor cost plus manufacturing overhead cost. In equation form: Conversion Cost = Direct Labor Cost + Manufacturing Overhead Cost
Degree of Operating Leverage Definition: A measure, at a given level of sales, of how a percentage change in sales volume will affect profits. The degree of operating leverage is computed by dividing contribution margin by net income.
Controlling Definition: Ensuring that the plan is actually carried out and is appropriately modified as circumstances change.
General Environment Definition: Broad external conditions that may affect the organization.
Controller Definition: Controller is defined as the manager in charge of the accounting department in an organization.
Control Definition: Control is the process of instituting procedures and then obtaining feedback to ensure that all parts of the organization are functioning effectively and moving toward overall company goals.
Full Costing Definition: Full costing is a costing method that includes all manufacturing costs – direct materials, direct labor, and both variable and fixed overhead – as part of the cost of a finished unit of product. This term is synonymous with absorption costing.