Relevant costs for progressive business solutions

Assignment Help Managerial Accounting

Reference no: EM1348710

Two partners who own Progressive Business Solutions, which currently operates out of an office in a small town near Boston, just discovered a vacancy in an office building in downtown Boston. One of the partners favors moving downtown because she believes the additional business gained by moving downtown will exceed the higher rent at the downtown location plus the cost of making the move. The other partner at PBS opposes moving downtown. He argues, "we have already paid for the office stationary, business cards, and a large sign that cannot be moved or sold. We have spent so much on our current office that we cannot afford to waste this money by moving." Evaluate the second partner's advice not to move downtown. Illustrate and fully explain using an example of relevant cost (a cost whose value does affect the optimal decision) and an example of irrelevant cost (a cost whose value does not affect the optimal decision) to the business regarding this decision.

Reference no: EM1348710

Questions Cloud

Range of activity for deciding cost behaviour : Why is it necessary for a company to specify a relevant range of activity when making assumptions about cost behavior?

Explain why how we do anything means everything : Explain Why How We Do Anything Means Everything by Dov Seidman and The Future of Management by Gary Hamel

Where and why would collaborative platforms or shared wor : Where and why would collaborative platforms or shared workspace applications be useful to virtual collaboration and find their advantages and disadvantages as applied to a business environment, with examples

Normative-informational social influence : Explain how both normative and informational social influence worked to convince Stanley Milgram's (1974) participants to deliver powerful shocks to a hapless learner.

Relevant costs for progressive business solutions : Two partners who own Progressive Business Solutions, which currently operates out of an office in a small town near Boston, just discovered a vacancy in an office building in downtown Boston.

Determine parity relationship suggests the futures price : Suppose a futures contract exists on Micromedia stock that expires in two months. Micromedia has a current market price of $200, has a beta of 1.15, a 0% dividend yield, and a standard deviation of .33. The current T-Bill rate is 5% yearly.

Illustrate what would it raise more money than today : Illustrate what would it raise more money than today, less money, or the same amount of money.

Important aspects of humanistic motivation : What is the single most significant aspect of humanistic motivation that differentiates it unambiguously from motives derived through Maslow's hierarchy and through behaviorally learned motivation?

Explain about international strategy : How do you see the kind of reaction to a broken trust and how would you advise someone who reacts this sort?

User Account

All Pages