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Unformatted text preview: 1 1 Ch 13 Relevance-OHs ADM 2341 Ch 13 Relevant Costing The differential/relevant costing approach applies equally to production decisions and to marketing. What costs (and revenues) differ under the alternatives faced. 2 Ch 13 Relevance-OHs ADM 2341 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 cost are relevant whether products should be processed further beyond the split off point Disposal of obsolete inventory or equipment. 3 Ch 13 Relevance-OHs ADM 2341 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....
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This note was uploaded on 09/13/2011 for the course ADM 2341 taught by Professor Managerialaccounting during the Winter '07 term at University of Ottawa.
- Winter '07