Class Notes Chapter 8 - The University of Texas at Austin...

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McCombs School of Business, Business Foundations Program ACC 310F: Foundations of Accounting Class Notes – Chapter 8 Overview Decisions outside of the ongoing day-to-day operations of a company require special attention. In this lesson, you'll learn how companies examine costs and other data that relate to short-run and long-run projects and opportunities to determine which should be undertaken. Should We Cater an Event? A potential customer asked your lemonade company to help cater an upcoming event by providing beverages for 50 guests (2 cups per guest); the customer offers to pay you $30. You plan on using a “4, 2, 2” recipe which produces 12 cups per pitcher. If the event will not interfere with your regular business, would you agree to cater the event? Relevant Costs and Benefits Relevant cost Relevant benefit Sunk cost Product Costs (DM, DL, OH) Period Costs Variable Costs Fixed Costs Decision Making Retain or replace
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Class Notes Chapter 8 - The University of Texas at Austin...

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