ADM 3346 Lecture Notes - Lecture 2: Industrial Engineering, Regression Analysis, Multicollinearity
9 May 2016
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Relevant: occur in the future and differ among the alternatives. Eg: opportunity costs occur without idle capacities relevant costs. Eg: book value of assets irrelevant. Dropping or keeping, product segments, equipment etc. Product cost: direct material, direct labour, manufacturing overhead. Work in process finished goods cogs. Inventoriable costs only occur in this section: merchandising section. Purchasing price, freight, insurance, handling, and storage costs etc. Revenue variable costs (dm, dl, moh, period costs) = cm. Cm fixed costs (moh, period costs) = oi. Capstone ch 10 & 11 question 2: sales price per unit: loser 90$, winner 225$ Total revenue = 1000 * 90 + 4000 * 225 = 990000. 25000 100000: loser fc = 5000 + 10 000 + 10 000 (corporate fixed portion) = 25000. Bep unit = 25000 / 45 = 556. Key points chapter 10 (including appendix 10a p383-391: methods of cost estimation. Quick and relatively accurate, but may cost potential interest conflicts.
