{"id":578,"date":"2018-04-18T22:57:13","date_gmt":"2018-04-18T22:57:13","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/?post_type=chapter&p=578"},"modified":"2024-04-29T17:28:37","modified_gmt":"2024-04-29T17:28:37","slug":"introduction-to-relevant-costs-and-business-decisions","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/chapter\/introduction-to-relevant-costs-and-business-decisions\/","title":{"raw":"Introduction to Relevant Costs","rendered":"Introduction to Relevant Costs"},"content":{"raw":"

What you'll learn to do:\u00a0Recognize relevant costs for common business decisions<\/h2>\r\nKnowing if a cost is relevant to the decision at hand is an important part of making good financial decisions. Taking time to leave costs in the mix that will not affect the outcome of the decision will waste valuable time. We have looked at some examples of relevant costs in some decision making situations, but let\u2019s take a look at a few more:\r\n\r\nIn this section, we will talk about how to decide whether to add or drop a product or service. We will also discuss a \u201cmake it\u201d or \u201cbuy it\u201d decision. There may also be a \u00a0sell it, or process it further decision to make, ending with special order decisions. All of these situations are real, and happen everyday in businesses. Having the ability to identify relevant costs and discard the ones that won\u2019t change the outcome of a decision is crucial to success!\r\n\r\nRemember, different costs are relevant for different decisions. So even if depreciation didn\u2019t matter in one decision, it may weigh heavily in another! Let\u2019s take a look at some decisions you may have to make!","rendered":"

What you’ll learn to do:\u00a0Recognize relevant costs for common business decisions<\/h2>\n

Knowing if a cost is relevant to the decision at hand is an important part of making good financial decisions. Taking time to leave costs in the mix that will not affect the outcome of the decision will waste valuable time. We have looked at some examples of relevant costs in some decision making situations, but let\u2019s take a look at a few more:<\/p>\n

In this section, we will talk about how to decide whether to add or drop a product or service. We will also discuss a \u201cmake it\u201d or \u201cbuy it\u201d decision. There may also be a \u00a0sell it, or process it further decision to make, ending with special order decisions. All of these situations are real, and happen everyday in businesses. Having the ability to identify relevant costs and discard the ones that won\u2019t change the outcome of a decision is crucial to success!<\/p>\n

Remember, different costs are relevant for different decisions. So even if depreciation didn\u2019t matter in one decision, it may weigh heavily in another! Let\u2019s take a look at some decisions you may have to make!<\/p>\n\n\t\t\t

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Candela Citations<\/h3>\n\t\t\t\t\t
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CC licensed content, Original<\/div>