ACC 410 Chapter 4: Chapter 4

• School: Ryerson University
• Department: Accounting
• Course: ACC 410
• Professor: Vanessa Magness

Document Summary

Chapter 4: relevant costs for non-routine operating decisions. routine operating decisions: mad on a regular schedule (ex: budgeting done in a year) non-routine decisions: occur less frequently than routine decisions (when we want to re-evaluate operations. Identify relevant quantitative analysis techniques (gather relevant information and apply it) consider quantitative and qualitative information to make a decision. product emphasis involving multiple resource constraints and multiple products. general decision rule: take the action that maximizes current-period income (or minimizes current-period losses) opportunity costs (cm of any regular business replaced) we want to be as well off after accepting the order as we were before we accepted it. fixed costs are irrelevant and sunk costs. general rule for keep or drop decision. general rule is we discontinue a product, service, or business segment when its total cm does not cover its avoidable fixed costs.