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Unformatted text preview: Joint cost is not a relevant cost Relevant: Incremental revenue and separable processing costs 1 E. Allocation of limited resources Contribution margin per unit of scarce resource F. Management Strategies for relaxing a constraint by expanding capacity: a. Outsourcng b. Parallel processing c. Working Overtime d. Retraining e. Eliminating non value added activities G. Uncertainty a. Sensitivity analysis b. Expected values IV. Activity-Based Costing and Decision Making V. Other Issues in Decision Making A. Conflict between decision making and performance evaluation B. Short-run versus long-run decisions Time value of money is critical when considering Long term decisions C. Pitfalls to avoid Sunk costs Unitized Fixed costs Allocated Fixed costs Overlooking Opportunity costs VI. Appendix: Linear Programming 2...
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