AFM102March92011

AFM102March92011 - Introduction to Management Accounting...

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Click to edit Master subtitle style 5/11/11 © Anthony Atkinson Introduction to Management Accounting March 9, 2011 Long Term Pricing and Relevant Cost Review 11
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5/11/11 © Anthony Atkinson Key Concepts in Today’s Class Issues in choosing a long run price Relevant cost concept review Dropping an organization unit Special order pricing 22
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5/11/11 © Anthony Atkinson Long Run Pricing Environment Price taker The organization must decide whether the total product related costs allow the firm to be profitable given the market price Price setter The market price in the long run will equal the total product related costs for an efficient organization plus an 33
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5/11/11 © Anthony Atkinson Target Costing and Price Taking 44
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5/11/11 © Anthony Atkinson 55
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5/11/11 © Anthony Atkinson 66 6-31 (a) The Billiards segment currently produces a segment margin of $40,000 − $25,000 = $15,000, so the Bar’s segment margin would have to increase by at least that amount in order for the Grill’s income to be at least as high as it is
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AFM102March92011 - Introduction to Management Accounting...

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