BUSI 601 Chapter Notes - Chapter 11: Lean Accounting, Average Variable Cost
12 Sep 2016
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Chapter 11: decision making with a strategic emphasis. Relevant costs: a future cost that differs between and among decision alternatives; an avoidable cost, must be incurred in the future and will differ between and among the decision maker"s options. Sunk cost: costs that have been incurred in the past or committed for the future and are therefore irrelevant for decision-making purposes. Opportunity costs: the benefit lost when choosing one option precludes receiving the benefits from an alternative option. Groups of cost elements (3: unit level costs, batch level costs. Value stream: a group of related products; useful for preparing profitability reports as part of lean accounting; all the activities required to create customer value for a family of products or services. Bill of materials: detailed list of the components of the manufactured product. Joint production process: a process that yields multiple outputs from a common resource input.
