Types?
Make or Buy
- saan makakatipid?
Accept or Reject Order
- if with excess = vc plus afc
- if without excess = vc plus afc plus cm
Retain or Replace
- compute mo total operating cost sa remaining life ng old and new
- add mo purchase price less salvage value dun sa new equipment
Retain or Eliminate Segment
- kunin mo controllable segment margin
- if positive retain
Sell immediately or process further
- compare mo yung incremental revenue and incremental cost
Scarce Resources
- if walang constraint , produce mo ung may highest CM
- if meron tapos limited demand, ipriority mo yung may highest CM per constraint
- if meron tapos unli demand , produce mo lang ung product na may highest CM per constraint
Choosing the best option?
Includes Future and Differential Cost
Specific cost considered as relevant?
- Incremental Analysis
- Relevant Costing
- variable cost plus avoidable fixed cost
