Welcome to the Financial Times Lexicon

Browse thousands of words and phrases selected by Financial Times editors and suggest new terms for the glossary.

 

Term of the day

death spiral (costing-based)

Some of an entity's overhead costs are either fixed (in that they remain the same irrespective of the volume of production or service-providing activity) or are semi-variable (in that a portion of the cost is fixed).  Eliminating a product or service can increase the overhead rate used to cost products or services because these fixed or semi-variable costs (the numerator in the overhead rate) remain the same or decrease more slowly than the cost allocation base (the denominator), which is often...