| activity | A basic unit of work.
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| activity drivers | Used to measure the demands that cost objects place on activities and to assign the cost of associated activities to cost objects. See cost object.
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| actual costs | Past payments for currently owned resources.
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| breakeven analysis | An analytical process that compares the fixed and variable costs of alternatives in order to identify the best alternative for a given volume of output.
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| cost object | An item for which costs are measured and assigned.
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| cost per unit | Total cost for producing the units of interest divided by the number of units produced.
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| cost traceability | The ease with which costs can be assigned to cost objects.
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| direct labor | Labor that can be traced directly to the good or service being produced.
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| direct materials | Materials that can be traced directly to the good or service being produced.
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| expected costs | Forecasted payments for future resources.
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| fixed costs | Costs that are not affected by volume.
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| nonproduction costs | The costs of selling and administration.
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| out-of-pocket costs | Cash payments made for resources.
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| overhead | All nondirect costs that exist after direct labor and direct materials have been identified.
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| period costs | Costs of resources used in nonproduction elements of a business.
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| product costs | Costs of resources used to make products.
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| production costs | Costs associated with the actual production of goods or services.
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| resource driver | A tool used to measure demands placed on resources by activities and to assign the costs of those resources to activities.
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| standard time | The result of a stopwatch time study after an adjustment by the performance rating and after allowances have been made.
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| total costs | The costs of all resources obtained in a particular period.
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| variable costs | Costs that increase or decrease as units produced increase or decrease.
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| variance | The difference between desired cost or consumption rate and the actual cost or consumption rate.
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| variance analysis | A process used to compare actual consumption of inventory and capacity to ideal consumption levels.
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