Marginal Analysis Flashcards
1
Q
Focuses on the relevant revenues and costs that are associated with a decision
A
Marginal analysis
2
Q
Relevant costs included in business decisions:
A
Direct costs Prime costs Discretionary costs Incremental costs Opportunity costs Avoidable costs
3
Q
Opportunities that require a firm to decide whether a specially priced order should be accepted or rejected
A
Special order decisions
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
5
Q
Sunk costs that are not relevant to decisions of whether to sell or to process further:
A
Joint costs
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