Terminology.

Required
Select the terms from the above list to complete the following sentences.

One common ____________ to a traditional or ____________ costing system is called an ____________ . The single MOH cost pool is separated into different ____________ distinguished from one another by their measure of benefits provided, or the ____________ . Benefits provided unequally to distinct types of outputs provide value added to customers, for which customers are willing to pay. This is the basic concept that guides the approach to cost reduction and control called ____________ . The management team identifies and eliminates ____________ and its costs and reorganizes the ____________ to minimize costs. There are four levels of activities in a cost hierarchy. From narrowest to broadest in scope they are ____________, _____________, _____________ (or ____________ ), and _____________ cost.

When a management team fails to develop a cost management system that reports faithfully the unequal benefits (and costs) of value-added activities there is a high risk of mispricing distinct types of outputs. If managers use ____________ pricing, an overcosted output will be priced too high and an undercosted product will be priced too low relative to the economic value added. The result is preventable of _____________ costs of the lower-priced by the higher-priced product.