5.5.1 Match the English terms in the left-hand column with the definition in the right-hand column.

1

Cost

A

A period of time in which all costs are variable.

2

Fixed cost

B

The market value, or agreed exchange value, that will purchase a definite quantity, weight, or other measure of a good or service.

3

Indirect costs

C

Information that can be used to evaluate or correct the steps being taken to implement a plan.

4

Administrative costs

D

A product-costing method that assigns all manufacturing costs to a product: direct materials, direct labour, variable overhead, and fixed overhead.

5

Long run

E

A detailed plan that outlines all sources and uses of cash.

6

Management by exception

F

All costs associated with the general administration of the organization that cannot be reasonably assigned to either marketing or production.

7

Break-even point

G

These are also known as Overhead Costs and are all those costs incurred in the organisation which cannot objectively be allocated to specific output, e.g. rent, insurance, supervision etc.

8

Master budget

H

Departure from prescribed internal control. Often expressed as a rate at which the departure occurs.

9

Pricing

I

The cash or cash equivalent value sacrificed for goods and services that are expected to bring a current or future benefit to the organization. A cost is the monetary value of all economic resources used in production of a good or service.

10

Overhead

J

Locations or functions which are readily identifiable and against which costs can be charged.

11

Selling price

K

The point where total sales revenue equals total costs; the point of zero profits.

12

Marginal cost

L

Costs that, in total, are constant within the relevant range as the activity output varies.

13

Feedback

M

The collection of all area and activity budgets representing a firm’s comprehensive plan of action.

14

Cost centre

N

The process of determining what a company will receive in exchange for its products.

15

Cash budget

O

All production costs other than direct materials and direct labour.

16

Deviation

P

The change in total cost that arises when the quantity produced changes by one unit.

17

Absorption costing

Q

Practice whereby only the information that indicates a significant deviation of actual results from the budgeted or planned results is brought to the management’s notice.