| A) | Any cost that can be eliminated (in whole or in part) by choosing one alternative over another in a decision-making situation. In managerial accounting, this term is synonymous with relevant cost and differential cost.
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| B) | That point in the manufacturing process where some or all of the joint products can be recognized as individual products.
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| C) | A pricing system in which a company establishes selling prices based on the economic value of the benefits that their products and services provide to customers.
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| D) | Two or more items that are produced from a common input.
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| E) | A limitation under which a company must operate (such as limited machine time available or limited raw materials available) that restricts the company's ability to satisfy demand for its products or services.
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| F) | A decision as to whether a joint product should be sold at the split-off point or processed further and sold at a later time in a different form.
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| G) | A pricing method, often used in service firms, in which two pricing rates are established—one based on direct labour time and the other based on direct materials used.
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| H) | The price of a customer's best alternative (called the reference value) plus the value of what differentiates the product from that alternative (called the differentiation value).
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| I) | A management approach that emphasizes the importance of managing constraints.
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| J) | A decision as to whether an item should be produced internally or purchased from an outside supplier.
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| K) | The difference between the selling price of a product or service and its cost. The markup is usually expressed as a percentage of cost.
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| L) | Contribution margin per unit ÷ Quantity of constrained resource required per unit
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| M) | A markup applied to the cost of materials that is designed to cover the costs of ordering, handling, and carrying materials in inventory and to provide for some profit.
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| N) | A one-time order that is not considered part of the company's normal ongoing business.
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| O) | Increasing the capacity of a bottleneck.
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| P) | Costs that are incurred up to the split-off point in producing joint products.
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| Q) | The involvement by a single company in more than one of the steps of the value chain, from production of basic raw materials to the manufacture and distribution of a finished product.
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| R) | A pricing method in which a predetermined markup is applied to a cost base to determine the target selling price.
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| S) | The process of determining the maximum allowable cost for a new product and then developing a prototype that can be profitably manufactured and distributed for that maximum target cost figure.
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| T) | A cost that differs among the alternatives in a particular decision and will be incurred in the future. In managerial accounting, this term is synonymous with avoidable cost and differential cost.
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