ABSORPTION COSTING Definition

ABSORPTION COSTING is the method under which all manufacturing costs, both variable and fixed, are treated as product costs with non-manufacturing costs, e.g. selling and administrative expenses, being treated as period costs.

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MANAGEMENT EXPENSE is the management fee deducted from a funds average net assets to pay an advisor or sub-advisor. This fee is normally on a sliding scale. As the net assets of the fund increase, the percentage deducted for management fees decreases. A fund can also have a fixed rate or flat fee to compensate the advisor.

COMPLIANCE AUDIT is the review of financial records to determine whether the entity is complying with specific procedures or rules.

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