Cost Accting CH. 10

Cost Accting CH. 10 - 1 The term relevance implies in cost...

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1. The term relevance implies in cost analysis implies that management is trying to find the revenues and costs that differ among alternatives. When information is relevant it must be associated with the decision under consideration, be important to the decision maker and have some connection or bearing on some future endeavor. 2. With a shorter time period to harder to change cost and revenues. Also the shorter the time period, the less precise information becomes because you cannot control as many things. 3. Opportunity costs represent the benefits foregone when one decision is made over another. Opportunity costs are obtained through estimates rather than precise information. Also, they are not included in the accounting records, making it even more difficult to analyze. 4. Sunk costs are costs incurred in the past to acquire an asset or a resource. They can’t be changed no matter what future course of action is taken because past expenditures are not recoverable regardless of current circumstances. Sunk costs
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This note was uploaded on 04/29/2008 for the course BUAC 3320 taught by Professor Doster during the Spring '08 term at Shawnee.

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Cost Accting CH. 10 - 1 The term relevance implies in cost...

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