ACCT-2020 Lecture Notes - Lecture 4: Marginal Cost, Opportunity Cost, Sunk Costs
2 Aug 2018
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Audio recording started: 11:24 am monday, february 19, 2018. Avoidable cost - a cost that can be eliminated by choosing one alternative over another in a decision. This term is synonymous with differential cost and relevant cost. Bottleneck - a machine or some other part of a process that limits the total output of the entire system. (p. 296) Constraint - a limitation under which a company must operate, such as limited available machine time or raw materials, that restricts the company"s ability to satisfy demand. (p. 295) Differential cost - a difference in cost between two alternatives. Differential revenue - the difference in revenue between two alternatives. (p. Joint costs - costs that are incurred up to the split-off point in a process that produces joint products. (p. 300) Joint products - two or more products that are produced from a common input. (p. 300) Make or buy decision - a decision concerning whether an item should be.
