1 / 5

M16: Relevant Costs

M16: Relevant Costs. Cash Outlays and Sunk Costs Differential costs: Differ between alternatives Decisions based on: Dif in Rev. – Dif. in Costs. Examples. Special Orders: Take care between competitors (Robinson Patman Act)

ramona-may
Download Presentation

M16: Relevant Costs

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. M16: Relevant Costs • Cash Outlays and Sunk Costs • Differential costs: Differ between alternatives • Decisions based on: Dif in Rev. – Dif. in Costs

  2. Examples • Special Orders: Take care between competitors (Robinson Patman Act) • Make or Buy: Once you buy can be difficulty to go back to making • Sell or Process on: If sell early, may give up ability to process on. • Limited Capacities: CM per unit of capacity used • Theory of Constraints: Maximize Revenue – Materials Costs

  3. M18: Activity, Customers • Overhead Allocation • Cost Objectives (Products), Pools, Allocation Bases • Service Department Costs: Direct, Step, Reciprocal • Activity Based Costing

  4. M21: Budgeting/Planning Incremental, rolling average, zero-based Sales Operations—Production, purchases, sales/marketing, administration Cash flows—Collections, disbursements, balances Balance Sheet

  5. M23: Segment Reporting, Transfer Pricing, Scorecard • Cost, Revenue, Profit, Investment Centers • Organization: product lines, geography, customers, markets • Transfer Prices: Market, Cost (variable, full,), negotiated, dual • Balanced Score Card: Financial, Customer satisfaction, internal process, innovation/learning • Instructor--Value: new products, quality, earnings

More Related