General Business ACC212 Chapter Notes - Chapter 7: Marginal Cost

• School: Seneca College
• Department: General Business
• Course: General Business ACC212
• Professor: Seanna Johnson

Document Summary

Describe management"s decision-making process and the concept of incremental analysis. Identify the relevant costs in accepting an order at a special price. Identify the relevant costs in a make-or-buy decision. Identify the relevant costs in deciding whether to sell or process materials further. Identify the relevant costs in deciding whether to retain or replace equipment. Identify the relevant costs in deciding whether to eliminate an unprofitable segment. Determine the sales mix when a company has limited resources. Does not always follow a set pattern or process: decisions vary in scope, decisions vary in urgency and importance. Considers both financial and non-financial information: financial information, revenues and costs, overall profitability, nonfinancial information, effect of decision on employee turnover, environment, overall image of company. Decisions involve a choice among alternative actions. Incremental analysis: process to identify financial data that change under alternative actions.