Ch 12 Relevance - Ch 12 Relevant Costs The...

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Ch 12 Relevant Costs The differential/relevant costing approach applies equally to production decisions and to marketing. What costs (and revenues) differ under the alternatives faced. 1 Ch12 ADM2341 Relevant Costs
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Typical issues for relevant costs: Drop or Add a product line Make or Buy: decide whether to make or buy certain pats, the outsourcing issue. Joint products: decide which costs are relevant and whether products should be processed further beyond the split off point Disposal of obsolete inventory or 2 Ch12 ADM2341 Relevant Costs equipment.
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Example: Wanted: Ride to Montreal after exams. Will pay half of the relevant costs. Call Nick at 544-7508 What is relevant is a function of the alternatives If you are already going to Montreal, the relevant costs are minimal. If you are not planning to go to Montreal, the relevant costs are greater. If you don't own a car and must buy or rent one, the relevant costs are very large. 3 Ch12 ADM2341 Relevant Costs
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This note was uploaded on 02/03/2010 for the course ADM ADM2341 taught by Professor Edden during the Winter '09 term at University of Ottawa.

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Ch 12 Relevance - Ch 12 Relevant Costs The...

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