Marginal Analysis Flashcards

1
Q

Focuses on the relevant revenues and costs that are associated with a decision

A

Marginal analysis

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2
Q

Relevant costs included in business decisions:

A
Direct costs
Prime costs
Discretionary costs
Incremental costs
Opportunity costs
Avoidable costs
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3
Q

Opportunities that require a firm to decide whether a specially priced order should be accepted or rejected

A

Special order decisions

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4
Q

If there is excess capacity, a comparison should be made of the:

A

Incremental costs of the order to the incremental revenue generated by the order

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5
Q

Sunk costs that are not relevant to decisions of whether to sell or to process further:

A

Joint costs

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6
Q

Costs incurred after the split off pint that can be traced to individual products and are relevant to the decision of whether to sell or process further

A

Separable costs

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