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Business Operating Activities
HAAS
26 cards·by Blessing
11.7.17
Activity Drivers...
reflect the consumption or provision of resources
Bill of Lading
A shipping agreement between the business and the common carrier
Cost Behaviors
How a cost reacts to change in the level of operating activity
Dependent Variable
A variable that depends on another variable
question
answer
Fixed Cost
A cost that doesnt change as the amount of the activity driver changes
Fixed Revenue
A revenue that doesn't change in total as the activity driver changes throughout the relevant
range
Free on Board (FOB) destination
A situation where legal title goods passes to the customer when the goods are picked up by the
common carrier
Independent Variable
A variable that does NOT depend on depend on another variable
Manufacturing Overhead
The cost of all the manufacturing resources used to make products that are not directly
associated with production
Mixed Cost
A cost that varies, but not proportionately, to a change in activity throughout the relevant
range
Purchase Allowances
Discounts given to unhappy customers (buyer's perspective)
Purchase Discounts
Discounts offered to induce customers to pay their bills early (buyer's perspective)
Purchase Order
A document sent from a buyer to a vendor to request items for purchase
Purchase Requisition
A dcoument used by an internal party to communicate their needs to the purchasing manager
Purchase Returns
Goods returned to the seller by the buyer (buyer's perspective)
Relevant Range
The span of operating activity that is considered normal for the company
Revenue Behavior
How a revenue reacts to change in the level of operating activity
Revenue Process
A series of interrelated activities designed to generate revenue
Sales Allowance
Discounts given to unhappy customers (seller's perspective)
Sales Discounts
Discounts offered to induce customers to pay their bills early (seller's perspective)
Sales Invoice
A document sent from a seller to a customer as a bill
Sales Returns
Goods returned to the seller by the buyer (seller's perspective)
Variable Cost
A cost that changes in direct proportion to the change in the amount of activity driver
throughout the relevant range
X variable
Independent Variable
Y Variable
Dependent Variable