Chapter 12 Full Student Version [Read-Only]

50 new machine will reduce labor costs from 10 to 95

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: is expected to be $2.50 New machine will reduce labor costs from $10 to $9.5 per hour Expected labor level per year: 1,000 hours with either machine 12-8 Decision making with a strategic emphasis Relevant cost information is often an important input for management decisions Other types of crucial information should also be considered Strategic information (long term) Capacity usage and opportunity cost The time value of money Make or buy decisions Add, keep or drop a product line or segment Accept or reject a special order Sell it or process it further 12-9 Adding/Dropping Segments 12-10 Adding/Dropping Segments One of the most important decisions managers make is whether to add or drop a business segment, such as a product or a store. Due to the declining popularity of digital watches, Lovell Company’s digital watch line has not reported a profit for several years. years. Lovell is considering discontinuing this this product line. Let’s see how relevant costs should be used in thi...
View Full Document

Ask a homework question - tutors are online