Relevant and irrelevant costs and revenues in startegic management accounting decision making for je
Costs can be classified as either variable or fixed with respect to units of output. Management accountant provides information and helps in decision making to the owner of the Jessup. If the division continues to operate, the cost shall continue to be incurred. So the management accountant of Jessup Ltd.
To profit maximization, the best way is to minimize cost, maximize revenues as well as generate sales. Learning Objective 1 Use the five-step decision process to make decisions.
Relevant Costs and Revenues Fixed costs would not decrease.
Difference between relevant and irrelevant cost in tabular form
This management accountant will make differentiation between relevant or irrelevant costs or revenues in decision making. These are also known as Differential Cost or Differential Revenue. What is the contribution of each product per machine-hour? So, in this case this is relevant. Common Fixed Cost Business value results from good decision making. To profit maximization, the best way is to minimize cost, maximize revenues as well as generate sales. In a particular decision making these costs and revenues are relevant.
Make Part 2 and do not make Part 3. Parker,
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