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Unformatted text preview: MGMT 640 Jiambalvo Text Chapter 7: The Use of Cost Info in Management Decision Making Commentary by Chenchu Bathala If the lady with the cart in the dairy section (picture in p. 261) is so puzzled to make a decision in comparing the limited number of product lines, brands, and varieties on the shelf in front of her, imagine the dilemma of business managers in evaluating the cost information on multitude of products/materials from numerous sources near and far. Plus, in some cases costs may be incurred today but the benefits (profits) come at a later date, adding uncertainty to the decision making process. Incremental Analysis Managers constantly look for ways to cut costs for improving profitability. One major question they address is: what is the incremental (additional, marginal, differential, relevant) cost and the incremental profit for a given decision alternative. The example in Illustration 7-1 shows incremental profit for a given decision alternative....
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This note was uploaded on 02/14/2011 for the course MGMT 640 taught by Professor Bathala during the Summer '09 term at UMBC.
- Summer '09