Assumptions-relevant costs , Managerial Accounting

Assumptions for relevant costs

The key assumptions made in relevant costing are:

  • The cost behavior is recognized.
  • The amount of fixed costs, unit variable costs, selling prices and sales demand are known with certainty.
  • The objective of the decision maker in the short-term is to maximize satisfaction which can be defined as maximization of short-term profit.
  • The information on which the decision is based is complete and reliable.

 

There are various types of decisions that can be considered in this section, Illustrations comprise:


a. Make or Buy decisions
b. Shut down problems
c. Extra shift decisions
d. Joint cost decisions

Posted Date: 12/5/2012 7:42:17 AM | Location : United States







Related Discussions:- Assumptions-relevant costs , Assignment Help, Ask Question on Assumptions-relevant costs , Get Answer, Expert's Help, Assumptions-relevant costs Discussions

Write discussion on Assumptions-relevant costs
Your posts are moderated
Related Questions
Classification of ratio according to significance   The ratios have also been classified according to their significance. Some ratios are more important than other and the fir

The Braggs & Struttin'' Company manufactures an engine for carpet cleaners called the "Snooper." Budgeted cost and revenue data for the "Snooper" are given below, based on sales of


Prepare a multiple step income statement, and classified balance sheet for XYZ Corporation for 2013 in good form. The income statement should include the proper earnings per share

Explain the Types of standards The following is the brief description of various types of standards: 1) Basic standards: these are the standards which are assumed to remai

Cash to debt service ratio  Cash to debt service ratio also known as debt cash flow coverage ratio is an improvement over the interest coverage ratio and is calculated. The

Absorption cost Absorption, or full cost systems, transfer the full cost of the supplying department to the receiving department. Where a profit is to be allowed to the supplyi

When to order-Material control If deliveries from suppliers normally take two weeks to arrive, then replenishment orders should be placed with them when the level of stocks rep

Introduction to pricing decision A pricing decision is one of the most crucial and difficult decision that a firm has to make. It is one of the most difficult decisions. Such

identify and briefly describe four trends in macro market environment which influence on the selected industry?