ACC 202 CH 12
Two or more products produced from a common input are called
Joint products
Sell or process further decision
Decision as to whether a joint product should be sold at the split off point
Make or buy decision
Decision concerning whether an item should be produced internally or purchased from an outside supplier
The point in the manufacturing process where each joint product can be recognized as a separate product is called the
Split off point
Should production and sale of racing bikes be discontinued?
TAKE OUT AVOIDABLE COSTS --advertising, salaries, etc
Relevant benefit
benefit that differs between alternatives
The machine or process that is limiting overall output is called the_____________ - it is the constraint.
bottleneck
When a limited resource of some type restricts the company's ability to satisfy demand, the company is said to have a
constraint
Relevant cost
cost that differs between alternatives
Avoidable cost
is a cost that can be eliminated, in whole or in part, by choosing one alternative over another. Avoidable costs are relevant costs. Unavoidable costs are irrelevant costs.
special order
is a one-time order that is not considered part of the company's normal ongoing business
opportunity cost
is the benefit that is foregone as a result of pursuing some course of action.