chapter 13 - Relevant Costs for Decision Making Chapter...

Info iconThis preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 13 Page 1 Accounting 2102 Relevant Costs for Decision Making Chapter Thirteen
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Chapter 13 Page 2 Accounting 2102 Making Business Decisions What makes data relevant to your decision? Pertains to the future Differs between alternatives Quantitative Analysis pitfalls unitized cost data be careful about using unitized cost data . . . fixed costs shouldn’t be unitized when analyzing numbers separate variable and fixed costs identify avoidable fixed costs Should your decision only address Quantitative considerations?
Background image of page 2
Chapter 13 Page 3 Accounting 2102 Application of Concepts Special Orders . . . Who Needs Jelly? Company Outsourcing Decisions  . . .  Four Wheel Deal, LLC Add or Drop . . . Stock Your Pantry, Inc. Process Further or Sell . . . Loco for Cocoa, Inc. Operational Constraints . . . Don’t Cry Over Spilled Milk, LLC
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Chapter 13 Page 4 Accounting 2102 Special Orders “Just this once . . . I want x units at a discounted price.” Excess capacity Regular sales Contribution margin Fixed costs
Background image of page 4
Chapter 13 Page 5 Who Needs Jelly? Company Who Needs Jelly? Company makes peanut butter which sells for $2.50 per jar. Costs related to each jar are as follows: Plant capacity is 100,000 jars. Currently, the company is operating at 80% capacity. Another company has approached about supplying 15,000 jars of peanut butter at a DM $1.00 VC per unit = $1.55
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Chapter 13 Page 6 Accounting 2102 Who Needs Jelly? Company Should Who Needs Jelly? consider this special order? yes, there is excess capacity How much would the differential income be if the order is accepted?
Background image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 05/08/2008 for the course ACCT 2102 taught by Professor Farmer during the Spring '08 term at University of Georgia Athens.

Page1 / 18

chapter 13 - Relevant Costs for Decision Making Chapter...

This preview shows document pages 1 - 7. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online