ACCT 23021 Lecture Notes - Lecture 9: Regional Policy Of The European Union, Outsourcing, Private Label
2 Aug 2020
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8. 1 describe and identify information relevant to short-term business decisions. 8. 2 describe and apply different approaches to pricing. 8. 3 decide whether to accept a special order. 8. 4 decide whether to discontinue a product, department, or store. 8. 5 factor resource constraints into product mix decisions. Describe and identify information relevant to short-term business decisions. Incremental analysis approach: look only at how operating income would change or differ under each alternative. Ignores irrelevant information - costs that do not differ between alternatives. Use a contribution margin approach that separates variable costs from fixed costs. Nonfinancial, or qualitative factors, also play a role in managers" decisions. Managers who ignore qualitative factors can make serious mistakes. Six short-term decisions: pricing, special orders, discontinuing products, departments, or stores, product mix when resources are constrained, outsourcing (make or buy, selling as is or processing further (not doing learning. Sunk costs: costs that have been incurred in the past and cannot be changed.
