The clayton facility will obviously have to be shut down its business can be shifted to the other two check processing centers in the region the decision being considered here is whether to continue operations at clayton the only relevant costs are the future facility costs that would be affected by. Clayton's costs—particularly their facility expenses—are just too high the clayton facility will obviously have to be shut down its business can be shifted to the other two check processing centers in the 2 do you think haley romeros's decision to shut down the clayton facility is ethical. In accounting, the term relevance means it will make a difference to a decision maker in other words, the original cost is irrelevant or is not relevant in the decision to replace the equipment what will have relevance are the future amounts, such as the cost of the new equipment, and the savings.
Relevant cost is a managerial accounting term that describes avoidable costs that are incurred when making business decisions the concept of relevant cost is used to eliminate unnecessary data that could complicate the decision-making process as an example, relevant cost is used to determine. The only cost that a firm should consider when making this decision is its average variable cost its total costs do not matter and neither do its fixed costs when a firm is making the decision about whether to shut down, it considers only one kind of cost. The company has estimated the facility cost in each country will vary depending on the economic conditions prevailing why might a profitable motel shut down in the long run if the land on which it is located becomes extremely what kinds of costs are involved in making a decision to shut down. A decision to shut down means that the firm is temporarily suspending production it does not mean that the firm is going out of business lower than average variable costs and the monopolist would be better off shutting down in the short run calculating the shutdown point.
Individual decision-making about consumption has been the subject of many theories and approaches in this paper, we are interested to propose some steps to include consumer decision making and behaviour in formal models, trying to do this in. School clayton state university 8 the decision rule in a decision to sell a product or to process it further is: process further as long as the incremental revenue from the additional processing exceeds the incremental processing costs therefore, joint costs are ignored in this decision 20-1. Relevant costing and costing for decision making in management accounting, notion of relevant costing has great significance because other group of theorists asserted that the relevant costs are applicable to decision costs are relevant, if they direct the executive towards the decision. Future costs are relevant in decision making if the decision will affect their amounts for example, suppose you're trying to decide whether to drive to work or take the bus relevant future costs information includes (1) the cost of gasoline and tolls needed to drive to and from work and (2. Protesters in clayton, missouri are training to shut down the town in the aftermath of the grand jury decision on the shooting death of michael brown during a meeting last night in south st louis, the demonstrators agreed that they want to hurt clayton economically by blocking traffic and occupying.
Relevant cost cost which are relevant for a particular business decision 150 per kg therefore variable cost is not relevant in this example sunk costs sunk costs are all costs incurred or committed in the past that cannot be changed by any decision made now or in the future. Relevant and irrelevant costs refer to a classification of costs it is important in the context of managerial decision-making costs that are affected by a decision are relevant costs and those. Relevant-cost analysis and opportunity costs the us defense department has the difficult decision of choosing which military base to shut the navy has decided that it needs only one of those two bases permanently, so one must be shut down the decision will be made on cost.
Clayton, mo (ktvi) - protestors are making plans to shut down clayton while they await the grand jury decision in the police shooting of michael brown they want to hurt clayton economically the information was released thursday night at one of their meetings in south st louis. If the firm decides to shut down and not produce any output, its revenue by definition is zero this makes sense since the fixed cost is present regardless of which course of action is taken and therefore logically shouldn't be a factor in the decision. Only the variable costs identified with a product are relevant in a decision concerning whether to eliminate are always relevant in decisions involving dropping a product line d can make a product line 4 this unprocessed milk is broken down into cream and low-fat milk only iii c information. However, commercially sound decisions about where to buy coal were impossible to make at that time private employers go out of business when unions increase their costs beyond a sustainable level it was this imbalance of power which brought down the callaghan government following the.
When price is below average variable cost, a firm in a competitive market will a shut down and in making a short-run profit-maximizing production decision, the firm must consider both fixed and a miniature golf course is a good example of where fixed costs become relevant to the decision of. In the country to shut down on wednesday, citing insufficient safety measures put in place after meltdowns at a facility in fukushima five years ago only a handful of the more than 40 operable reactors in the country have met the new rules, and lawsuits have made it difficult to restart them. Costs and making decisions with today's sophisticated technology and advanced accounting software for small businesses, data is readily available on just about every aspect of a company's activities the first step is to determine which costs are relevant to the decision and which are not.
The relevant costs for decision purposes will be the sum of: i) 'avoidable outlay costs', ie those costs which will be incurred only if the book project is approved b) if the decision is to shut down, whether the closure should be permanent or temporary shutdown decisions often involve long term. The only relevant costs are the future facility costs that would be affected by this decision if the facility were shut down, the clayton facility has no resale value in addition, if the clayton facility were sold, the company would have to rent additional space at the remaining processing centers. Relevant cost refers to the incremental and avoidable cost of implementing a business decision while relevant costing is a useful tool in short-term financial decisions, it would probably not be wise to form it as the basis of all pricing decisions because in order for a business to be sustainable in the.