Chapter 10 Study Plan

Study Plan: Relevant Costing for Managers

Knowledge Targets

I can define the following terms as they relate to our unit:

Avoidable Cost Constraint Make or Buy Differential Cost

Differential Revenue Joint Product Joint Cost Opportunity Cost

Sunk Cost Relevant Benefit Relevant Cost Sells or Process further

Special Order Split Off Point Constrained Resource

Reasoning Targets

  • I can identify costs as relevant, avoidable, opportunity or sunk cost.
  • I can classify costs as relevant or not relevant.
  • I can determine value and use of a constrained resource.

Skill Targets

  • I can prepare an analysis showing if a product line or business segment should be dropped or added.
  • I can prepare make or buy analysis.
  • I can prepare analysis showing whether a special order should be accepted or rejected.
  • I can prepare an analysis showing whether a joint product should be sold at the split off point or processed further.

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