Final answer:
The cost of goods that have been sold after adjusting for overhead variance is known as the adjusted cost of goods sold. Key financial concepts include accounting profit, economic profit, average total cost, and average variable cost.
Step-by-step explanation:
The cost of goods that have been sold, after an adjustment is made for the period's overhead variance, is referred to as the adjusted cost of goods sold. This adjustment incorporates the actual overhead costs incurred, in contrast to the initially estimated overhead that would have been applied to the cost of goods sold. In accounting, it's important to differentiate between various types of profits and costs. For instance, accounting profit is calculated by subtracting explicit costs, including depreciation, from total revenues. Economic profit, meanwhile, takes into account both explicit and implicit costs. Terms such as average total cost, which is the total cost divided by the quantity of output produced, and average variable cost, which is the variable cost divided by the quantity of output, are essential in analyzing the financial performance of a firm. The concept of 'spreading the overhead' refers to the way fixed costs, labeled as overhead, are distributed over the quantity of output; as more products are made, the average fixed cost per unit decreases.