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Administration (2,738)
ADM2304 (69)
Tony Quon (67)
Lecture 12

ADM2304 Lecture 12: 12
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Department
Administration
Course
ADM2304
Professor
Tony Quon
Semester
Fall

Description
Beware of Allocated Fixed Costs Why should we keep the digital watch segment when its showing a 100K loss? The answer lies in the way we allocate common xed costs products. to our Our allocations can make a segment look less protable than it really is. Example: opportunity cost = the benet that is foregone as a result of pursuing some course of action. Opportunity costs are not actual dollar outlays and are not recorded in the formal accounts of an organization. special order = a onetime order that is not considered part of the companys normal ongoing business.
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