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Business Math Ch. 11

Vocabulary

QuestionAnswer
Expenses incurred while traveling for business; mileage, hotel fees, meal charges, airfares, taxi fares, rental car charges, expenses for entertaining customers, and related expenses. Travel Expenses
Free on board; a term used in price quotations to tell who will pay transportation costs. F.O.B.
A service for delivery of heavy, bulky goods. Freight
Allows you to claim depreciation over a fixed number of years depending on the class life of the property. Modified Accelerated Cost Recovery System (MACRS)
A variable-rate way of depreciating that provides decreasing amounts of depreciation as an item ages. Sum-Of-The-Years-Digits Method
A way of figuring depreciation at a fixed rate on a decreasing balance; fixed-rate method. Declining-Balance Method
Original cost less total depreciation to date. Book Value
Costs such as raw materials, direct labor, and energy that vary or change with the amount of goods produced and sold. Variable Costs
Overhead items such as rent, salaries, heat, and insurance that remain the same no matter how much is produced and sold. Fixed Costs
The point at which income from sales equals total costs of producing and selling goods. Break-Even Point
The sum of the costs of raw materials, direct labor, and factory expense. Total Manufacturing Cost
The total cost of items such as rent, depreciation, heat, light, power, insurance, supplies, and indirect labor used in a factory. Factory Overhead
The cost of raw materials and direct labor. Prime Cost
An employee who is needed and paid by the day. Per Diem
Created by: acopper
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