Short term decisions Flashcards
1
Q
what 3 things must relevant costs
A
future
incremental
cash flow
2
Q
4 costs that are not relevant
A
sunk cost
committed cost
notional cost
fixed costs
3
Q
what is a sunk cost
A
already incurred
4
Q
what is a committed cost
A
costs that the business have already agreed to before making decisions on the launch of the product
5
Q
what is a notional cost
A
non cash items or accountancy entries
6
Q
what does incremental costs mean for relevant costs
A
the costs that will increase depending on the decision made.
