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# CA Test 2

### Cost Accounting Test 2 - Chapter 4, 5

Question | Answer |
---|---|

Process of estimating revenues and costs of alternative actions available to decision makers and of comparing these estimates to the status quo. | Differential Analysis |

Period of time over which capacity will be unchanged, usually one year. | Short Run |

With two or more alternatives, costs that differ among or between alternatives. | Differential Costs |

Costs incurred in the past that cannot be changed by present or future decisions. | Sunk Costs |

Sum of all fixed and variable costs of manufacturing and selling a unit. | Full Cost |

Order that will not affect other sales and is usually a short-run occurrence. | Special Order |

Time from initial research and development to the time that support to the customer ends. | Product Life Cycle |

Price based on customers' perceived value for the product and the price that competitors charge. | Target Price |

Equals the target price minus the desired profit margin. | Target Margin |

Practice of setting price below cost with the intent to drive competitors out of business. | Predatory Pricing |

Exporting a product to another country at a price below domestic cost. | Dumping |

Practice of selling identical goods to different customers at different prices. | Price Discrimination |

Practice of setting prices highest when the quantity demanded for the product approaches capacity. | Peak-load Pricing |

Agreement among business competitors to set prices at a particular level. | Price Fixing |

Decision concerning whether to make needed goods internally or purchase them from outside sources. | Make-or-buy Decision |

Activity, resource, or policy that limits or bounds the attainment of an objective. | Constraint |

Contribution margin per unit of a particular input with limited availability. | Contribution Margin Per Unit of Scarce Resource |

Focuses on revenue and cost management when faced with bottlenecks. | Theory of Constraints (TOC) |

Operation where the work required limits production. | Bottleneck |

Sales dollars minus direct materials costs and variables such as energy and piecework labor. | Throughput Contribution |

Cost estimate based on measurement and pricing of the work involved in a task. | Engineering Estimate |

Cost estimation method that calls for a review of each account making up the total cost being analyzed. | Account Analysis |

Limits within which a cost estimate may be valid. | Relevant Range |

Graph that plots costs against activity levels. | Scattergraph |

Method to estimate costs based on two cost observations, usually at the highest and lowest activity levels. | High-low Cost Estimation |

Statistical procedure to determine the relation between variables. | Regression |

X term, or predictor, on the right-hand side of a regression equation. | Independent Variable |

Y term or the left-hand side of a regression equation. | Dependent Variable |

Measure of the linear relation between two or more variables, such as cost and some measure of activity. | Correlation Coefficient |

Square of the correlation coefficient, interpreted as the proportion of the variation in the dependent variable explained by the independent variable(s). | Coefficient of Determination |

t is the value of the estimated coefficient, b, divided by its standard error. | t-statistic |

Correlation coefficient squared and adjusted for the number of independent variables used to make the estimate. | Adjusted R-squared (R2) |

The systematic relationship between the amount of experience in performing a task and the time required to perform it. | Learning Phenomenon |