TD-Relevant Costing - Relevant Costing We have shown in...

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Relevant Costing We have shown in this module that poor decision making may result when acceptable prices are determined by adding a fixed percentage to the "full cost" of a product when that "full cost" includes a unitized fixed cost. The lesson in the module is that any selling price above the contribution margin will add to the wealth of the firm. This being the case, is there a danger in the decision rule that states "always accept any offer that has a positive contribution margin?" Please expand on your explanation by giving examples. Though it is a given that any selling price above the contribution margin will add to the wealth of the firm, I do not believe in "always accept any offer that has a positive contribution margin" as a given for positive results. there are consequences for raised priced or lost incentives by any given corporation as a general rule (cause and effect). Unknown variables can present themselves as a negative on the total outcome of the net operating income. Raised prices to
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This note was uploaded on 10/15/2011 for the course ACCT 201 taught by Professor Anothony during the Spring '10 term at Trident Technical College.

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TD-Relevant Costing - Relevant Costing We have shown in...

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