ACCT 001 Lecture 25: Acct 1 L. Notes - 25
Document Summary
The cash receipts budget shows cash receipts that are generated from operating activities. Cash sales of inventory or services and customer payments on account. Deciding whether to accept a special order is a short-run decision. No excess capacity special orders are rarely accepted if a company does not have excess capacity. Excess capacity even when excess capacity exists, and a special order is profitable, companies must consider qualitative factors. Fixed costs can be relevant to a special-order decision. The decision to outsource requires an in-depth analysis of relevant quantitative and qualitative factors. Advantages: not dependent on timely delivery and can control quality. Disadvantages: suppliers may supply higher-quality items at less cost. The decision to drop a product or service. Qualitative factors are sometimes more important than focusing solely on income. The decision to drop a product or a service is among the most difficult that a manager can make.