Target net income is the desired profit after accounting for income tax expenses. To calculate it, one takes the target operating income and subtracts the tax liability, which is determined by multiplying the operating income by the applicable tax rate. This provides a realistic view of the actual profit the business expects to retain.

To determine the variance between the flexible budget and the actual results, one must calculate the difference between the two figures. Subtracting the actual result of $45,000 from the flexible budget amount of $82,000 yields a difference of $37,000. This variance indicates the extent to which actual costs or revenues deviated from the expectations set forth in the flexible budget for the actual level of activity.

In cost accounting, costs are categorized based on their relationship to the cost object. Customer-level costs are those that can be traced to a specific customer but are often indirect in relation to individual products. These costs include activities like processing orders (batch-level), providing support (sustaining), or shipping units (output-unit level), all of which are classified as customer-level indirect costs.

A fixed cost is an expense that remains constant regardless of the level of production or business activity. Rent is a classic example of a fixed cost because the amount payable is typically set by a lease agreement and does not fluctuate with the volume of goods produced or services rendered during a specific period.

When the amount of indirect cost allocated to products or services exceeds the actual indirect costs incurred during a period, the difference is referred to as over-allocated indirect cost. This indicates that the predetermined overhead rate used for allocation was higher than the actual rate experienced.

Customer-sustaining costs are those expenses incurred to support individual customers regardless of the number of units or batches sold to them. Examples include account management, customer service support, and specific administrative tasks performed for a single client. Identifying these costs is crucial for determining the true profitability of individual customer relationships and for making informed decisions regarding service levels and pricing strategies for specific accounts.

Production volume variance is specifically associated with fixed overheads, as it measures the difference between budgeted fixed overhead and the amount absorbed by production. Variable overhead variances, conversely, focus on spending and efficiency related to variable inputs. Therefore, production volume variance is not a component of variable overhead variance analysis, as it does not relate to the variable nature of the costs being analyzed.

A decision table is a structured tool used in management accounting and operations research to map out various decision alternatives, potential states of nature, and the resulting outcomes or payoffs. By assigning probabilities to these outcomes, managers can perform expected value analysis to make informed, data-driven decisions under conditions of uncertainty.

Factory overhead costs, also known as manufacturing overhead, include all production-related costs that are not direct materials or direct labor. These are necessary for the factory to operate but cannot be easily traced to a single product.

The book value of existing assets is considered an irrelevant cost in decision-making because it represents a historical cost or a sunk cost. Since this expenditure has already occurred and cannot be recovered regardless of the future decision made, it does not influence the choice between alternatives. Therefore, it is excluded from the analysis of future-oriented decision-making scenarios.