| Acronym used for the 8 wastes identified by advocates of lean thinking |
| | Costs incurred to avoid producing poor-quality goods or services |
| | Raw materials are purchased just in time for production |
| | Considers that each product manufactured may require different types and amount of activities |
| | Costs incurred on defective units before delivery to customers |
| | Management philosophy focused on creating value for the customer by eliminating waste |
| | Increase the accuracy of job costs when each department incurs different types and amounts of manufacturing overhead and/or each product or job uses departments to a different extent |
| | Uses activity based cost information to make decisions that increase profits while satisfying customer needs |
| | No inventory is made until the order has been received |
| | Total manufacturing costs associated with an activity |
| | Costs incurred because defects are not detected until after delivery to customers |
| | Tools, materials and equipment are stored in proximity to where they will be used more frequently |
| | Costs incurred to detect poor-quality goods or services |
| | Activities for which the customer is willing to pay |
| | Total estimated activity cost pool / total estimated activity allocation base |
| | The cost allocation system causes some products to be overcosted and other products to be undercosted |
| | Another name for the predetermined manufacturing overhead rate |
| | Waste activities |
