AFM102 Chapter Notes - Chapter 12: Sunk Costs, Total Quality Management, Management Accounting

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM102
• Professor: Jie Joyce Tian

Document Summary

Relevant costs: a cost that differs among the alternatives in a particular decision and will be incurred in the future. Joint product costs and the sell or process further decision. Joint products: two or more items that are produced from a common input. Joint product costs: common costs incurred to simultaneously produce a variety of end products: allocation of common costs among different products at the split-off point, according to relative sales value of the end products. Joint costs irrelevant in these decisions sunk cost: profitable processing after split-off as long as the incremental revenue from such processing exceeds the incremental processing cost incurred after the split-off point. Joint costs of buying and separating: relevant considering profitability of entire operation, not relevant considering profitability of any one product. Linear programming: quantitative methods and operations management courses. > pricing products and services: cost-plus pricing, markup: the difference between the selling price of a product or service and its cost.