Thus this chapter also bridges forward to the

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Unformatted text preview: ppropriate for several types of decisions that managers frequently must make. These decisions, called alternative choice decisions, occur when a manager must analyze cost behavior under two or more approaches to accomplishing a particular task. The chapter discusses how full cost information can lead managers to make decisions that are financially detrimental to the organization, and makes the point that for alternative choice decisions, the appropriate information is differential costs. Chapter 4. Absorption Costing Chapter 1 focuses principally on service organizations. Chapter 4 looks at various types of costs that exist in a manufacturing setting and shows how to compute cost of goods manufactured and cost of goods sold with job order and process systems. The chapter also discusses overhead rates, including predetermined overhead rates, flexible overhead budgets, the computation of overhead variances, and the managerial uses of overhead variances. Chapter 5. Activity-Based Costing and Variable Costing This chapter first examines the...
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