CUT-OFF RATE Definition

Bookmark and Share

CUT-OFF RATE is the predetermined maximum rate and/or minimum rate at which the subject is still acceptable, but where a rate above the proscribed higher or below the proscribed lower rate is no longer acceptable.

Learn new Accounting Terms

CAPTIVE DISTRIBUTOR is one held under control of another but having the appearance of independence; especially: owned or controlled by another concern and operated for its needs rather than for an open market.

STANDARD COST PRICING is a development of the cost-plus approach to setting prices is to use cost 'standards' based on management accounting systems. Variable costs of production (materials, labor, bought-in components, etc.) are added up and divided by the number of units intended to be produced to give a variable cost per unit. Similarly running costs of the organization (rent, rates, energy, maintenance, together with management and administrative costs) are totaled and divided by the number of units to be sold to provide the fixed cost per unit. Finally the profit required is added in on a per unit basis. Adding together the variable cost, fixed cost and profit per unit gives the selling price.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.