| activity-based responsibility accounting | A system for measuring the performance of an organization's people and subunits, which focuses not only on the cost of performing activities but on the activities themselves.
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| allocation base | A measure of activity, physical characteristic, or economic characteristic that is associated with the responsibility centers that are the cost objects in an allocation process.
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| appraisal costs | Costs of determining whether defective products exist.
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| common costs | Costs incurred to benefit more than one organizational segment.
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| cost allocation | The process of assigning costs in a cost pool to the appropriate cost objects. Also see cost distribution.
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| cost center | A responsibility center whose manager is accountable for its costs.
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| cost objects | Responsibility centers, products, or services to which costs are assigned.
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| cost pool | A collection of costs to be assigned to a set of cost objects.
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| customer profitability analysis | Using the concepts of activity-based costing to determine the activities, costs, and profit associated with serving particular customers.
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| environmental cost management | Strategies for reducing, eliminating, or otherwise controlling environmental costs.
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| environmental costs | Costs incurred in dealing with environmental issues.
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| external failure costs | Costs incurred because defective products have been sold.
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| goal congruence | A meshing of objectives, where managers throughout an organization strive to achieve the goals set by top management.
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| grade | The extent of a product's capability in performing its intended purpose, viewed in relation to other products with the same functional use.
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| internal failure costs | Costs of correcting defects found prior to product sale.
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| investment center | A responsibility center whose manager is accountable for its profit and for the capital invested to generate that profit.
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| performance report | A report showing the budgeted and actual amounts, and the variances between these amounts, of key financial results for a person or subunit.
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| prevention costs | Costs of preventing defective products.
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| profit center | A responsibility center whose manager is accountable for its profit.
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| quality of conformance | The extent to which a product meets the specifications of its design.
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| quality of design | The extent to which a product is designed to perform well in its intended use.
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| responsibility accounting | Tools and concepts used by managerial accountants to measure the performance of an organization's people and subunits.
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| responsibility center | A subunit in an organization whose manager is held accountable for specified financial results of its activities.
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| revenue center | A responsibility center whose manager is accountable for its revenue.
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| segmented income statement | A financial statement showing the income for an organization and its major segments (subunits).
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| Six Sigma | An analytical method that aims at achieving near perfect results in a production process.
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| sustainable development | Business activity that produces the goods and services needed in the present without limiting the ability of future generations to meet their needs.
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| total quality management (TQM) | The broad set of management and control processes designed to focus an entire organization and all of its employees on providing products or services that do the best possible job of satisfying the customer.
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