Important Terms

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来自 University of Virginia 的课程

Managerial Accounting Fundamentals

70 个评分

University of Virginia

Managerial Accounting Fundamentals

70 个评分

This course will teach you the fundamentals of managerial accounting including how to navigate the financial and related information managers need to help them make decisions. You'll learn about cost behavior and cost allocation systems, how to conduct cost-volume-profit analysis, and how to determine if costs and benefits are relevant to your decisions. By the end of this course, you will be able to: - Describe different types of costs and how they are represented graphically - Conduct cost-volume-profit analyses to answer questions around breaking even and generating profit - Calculate and allocate overhead rates within both traditional and activity-based cost allocation systems - Distinguish costs and benefits that are relevant from those that are irrelevant for a given management decision - Determine a reasonable course of action, given the financial impact, for a given management decision

从本节课中

RELEVANT COSTS AND BENEFITS

In our final week, we'll discuss costs and benefits, and gain an understanding of those that are relevant for a given decision. We'll evaluate the financial impact of a given decision, then determine a reasonable course of action.

Week 4 Overview1:13

Relevant Costs and Benefits3:07

Important Terms2:50

Relevant Costs in an Example4:16

Your Turn: Relevant Costs and Benefits4:04

Special Order Decision7:12

Your Turn: Special Order Decision3:45

Make or Buy Decision5:43

Your Turn: Make or Buy Decision4:49

Keep or Drop a Product Line Decision5:23

Your Turn: Keep or Drop a Product Line Decision4:22

Product Mix Decisions10:53

Your Turn: Product Mix Decisions4:22

与讲师见面

Luann J. Lynch
Almand R. Coleman Professor of Business Administration
Darden School of Business

When talking about the relevance of costs,

there are several cost terms that are important to understand.

Sunk costs, future costs, also known as outlay costs or

out-of-pocket costs, and opportunity costs.

Let's discuss these in a bit more detail, starting with sunk costs.

Sunk costs are costs that are incurred because of a past decision that

cannot be changed or avoided.

Sunk costs usually are not relevant costs because an organization

will incur those regardless of which alternative it chooses.

An example, well, consider the cost of a machine purchased previously.

That cost is not relevant when considering whether to replace the machine.

Likewise depreciation, which is essentially the allocation of that

cost to different periods, is not relevant either.

But, if you can sell the old machine after replacing it with a new machine,

the proceeds you would get from selling it are relevant to the decision.

Next, future costs.

Future costs require a future outlay of cash.

They're also called out-of-pocket costs or outlay costs.

Future costs can be changed or

avoided depending on the decision that the organization makes.

As a result, future costs are typically relevant costs when making a decision.

And finally, opportunity costs.

Opportunity costs are benefits that the organization forgoes

as a result of deciding to pursue a particular alternative.

Opportunity costs can be changed or

avoided, depending on the decision the organization makes.

As a result, these two are typically relevant costs when making a decision.

An example, well suppose you are considering quitting your job and

going back to graduate school to get a graduate degree.

The salary you give up is an opportunity cost of going back to school.

It's a benefit that you give up by choosing the going back to school

alternative.

Now, lets think briefly about relevant benefits.

Those can include things like future revenues and those future revenues would

be relevant to a decision if they differ between the alternatives being considered.

Another example is proceeds the organization receives if it disposes of or

it sells something.

If those differ between the alternatives being considered, then they are relevant.

These are just a few examples of relevant benefits.

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