Accounting 2 Chapter 10

Relevant Benefits

Benefits that differ between alternatives

A machine or process that is limiting overall output is called the what?

Bottleneck

Two or more products that are produced from a common input are known as what?

Joint Products

When a limited resource of some type restricts the company's ability to satisfy demand, the company has a what?

Constraint

Relevant Costs

Costs that differ between alternatives

When a manager increases the capacity of the bottleneck, it is called what?

Relaxing (or elevating) the constraint

The point in the manufacturing process at which the joint products can be recognized as seperate products.

Split-Off Point

Joint Cost

Used to describe the costs incurred up to the split-off point

Vertically Integrated

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

Make or Buy Decision

A decision to carry out one of the activities in the value chain internally, rather than to buy externally from a supplier