Acc200Day18 - Accy 200 Day 18 edit Master subtitle style...

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Click to edit Master subtitle style Accy 200 Day 18 Peter A. Silhan
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Agenda CH16 Short-Term Problem Solving (excluding long-run capital budgeting) CH14 Production Budgeting Q&A
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Relevant Cost Information A relevant cost is a future cost that differs between alternatives. Obj10 1 2
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Relevant Cost Information Obj101
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Short-Run Decisions (Key Issue: only those costs that represent differences between alternatives are relevant) Special Pricing : is firm operating at full or idle capacity? Discontinue Segment: is the SG margin contributing to common FC? Make or Buy Decisions : how much cost can be avoided if product/service is outsourced? Sell or Process Further : do incremental revenues exceed incremental costs?
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Relevant Cost Information Will you drive or fly to Colorado for an eight-day semester break ski trip? You have gathered the following information to help you with the decision. l Motel cost is $90 per night. l Meal cost is $25 per day. l Your car insurance is $75 per month. l Kennel cost for your dog is $7 per day. l Round-trip cost of gasoline for your car is $200. l Round-trip airfare and rental car for a week is $700. Driving requires two days, with an overnight stay, cutting your
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Colorado Spring Break Drive/Fly Analysis Cost Drive Fly Motel 720 $ 720 $ Eating out costs 200 200 Kennel cost 56 56 Car insurance 75 75 Gasoline 200 - Airfare/rental car - 700 Relevant Cost Information Costs do not differ, so they are not relevant to decision. Note: car insurance is also a past cost
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The Special Pricing Decision MicroTech receives an offer to purchase 500 of its laptop computers for $1,800 each.
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Acc200Day18 - Accy 200 Day 18 edit Master subtitle style...

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