Relevant Costs for Decision Making

process a joint product further if....

incremental revenue from such processing > the incremental processing costs incurred after the split-off point.

Joint costs are ____________ in decisions regarding what to do with a product from the split-off point forward

irrelevant

Ultimately, a decision to drop an old segment or add a new one is going to hinge primarily on....

net operating income

what does it mean to be vertically integrated?

When a company is involved in more than one activity in the entire value chain

define relevant cost

a cost that differs among future alternatives

managers must analyze each decision situations b/c...

costs that may be relevant in one situation may not be relevant in another

example of joint products

crude oil produces oil, gas and chemicals

Joint costs are traditionally allocated among different products at the ___________ according to the __________ _________ _________ of the end products.

split-off point; relative sales value

total contribution margin will be maximized by promoting those products or accepting those orders that provide the highest contribution margin in relation to...

the constraining resource.