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18 Cards in this Set
- Front
- Back
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relevant cost
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occurs in the future and differs between decision alternatives; can influence a decision
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differential cost
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costs that differ between alternatives
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incremental cost
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costs that differ between alternatives
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avoidable cost
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a cost that can be avoided by choosing one decision alternative instead of another
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sunk costs
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cost that were incurred in the past
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irrelevant costs
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costs that will not influence a decision because already incurred or does not differ between alternatives
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idle or excess capacity
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company has more than enough resources to satisfy demand
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full capacity
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the limit on one or more of a company's resources has been reached
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special-order decisions
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requires managers to decide whether to accept or reject an order that is outside the scope of normal sales
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make- or buy decisions
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insourcing vs outsourcing decisions
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keep or drop decisions
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continue-or-discontinue decisions regarding the decision to eliminate a business segment
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segment margin
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sales revenue less all costs that are attributable to the segment which includes variable and fixed costs
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direct fixed cost
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a cost that can be attributed to a specific segment of the business
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common fixed cost
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costs shared by multiple segments and will be incurred even if a segment is eliminated
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substitute products
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products that can be used in place of one another
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complementary products
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products that are used together
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constrained resource
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anything that is needed to operate the business such cash, employees, machines, or facilities
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bottleneck
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limit's the system's overall output determines how much contribution margin is lost due to limited resources
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