AOP Definition

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AOP is either Adjusted Operating Profit or Annual Operations Plan.

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MARGINAL COST is a calculation showing the change in total cost as a result of a change in volume, e.g. if one more item of output increases the total cost by $25, the marginal cost is $25. It is usually useful to determine marginal cost because it can aid in determining if the rate of production should be altered.

UNDER-APPLIED FACTORY OVERHEAD is the amount of residual factory overhead that remains once all known overhead allocations are assigned to the applicable products. See also UNABSORBED COSTS.

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