short chp 14 notes

short chp 14 notes - Accounting information is particularly...

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Accounting information is particularly important when a company evaluates alternatives o When evaluating each decision alternative key question is “what difference does it make?” Important area that alternatives make difference is company’s profit To understand profit impact of each its important to analyze the changes in its costs and revenues cause by each alternative Managers must carefully analyze relevant costs and revenues that will change as a result to understand the profit impact of a decision o Other important considerations are how alternative affects employees, community or the environment Activities necessary to carry out a decision are the cause of all relevant costs o Only costs that company incurs as a result of performing these activities can be relevant Must be future costs Eliminates costs incurred prior to making decision known as past or sunk costs Whatever decision is made will not regain these costs Ex. Machine purchased last year is not relevant because company
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This note was uploaded on 02/06/2012 for the course COMM 1200 taught by Professor Hockman during the Spring '07 term at Missouri (Mizzou).

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short chp 14 notes - Accounting information is particularly...

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