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Chapter 23 Relevant Costing for Managerial Decisions
Chapter 23
Relevant Costing for Managerial Decisions
Related Assignment Materials
Student Learning Objectives
Discussion
Questions
Quick
Studies*
Exercises*
Problems*
Beyond the
Numbers
Conceptual objectives:
C1. Describe the importance of
relevant costs for short-term
decisions.
3, 4, 5, 6, 8, 10
23-5
23-1
GD
Analytical objectives:
A1. Evaluate short-term managerial
decisions using relevant costs.
1, 2, 4, 5
23-2,
23-6, 23-7,
23-8, 23-9,
23-10, 23-11,
23-12
23-1, 23-2, 23-3,
23-4, 23-5, 23-6,
23-7, 23-8, 23-9,
23-10, 23-11,
23-12, 23-13
23-2, 23-3,
23-4, 23-5,
23-6
RIA, CA, EC,
ED, TTN
A2. Determine product selling
price based on total costs.
Procedural objectives:
P1. Identify relevant costs and
apply them to managerial
decisions.
4, 5, 6, 7, 9
23-1,23-3,
23-4, 23-6,
23-8, 23-9,
23-10, 23-11,
23-12
23-2, 23-3,23-4,
23-5, 23-7, 23-9
23-1, 23-2,
23-3, 23-4
EC, CIP, TIA,
HTR
* See additional information on next page that pertains to these quick studies, exercises and problems.
© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a
website, in whole or part. 23-2
• Streamlined selected explanations
PowerPoint® Show Slides
Chapter Learning Objective
PowerPoint® Slides
C1
6-7, 9-11
P1
8, 16-19, 21-23, 25-28, 31-32, 34-37, 39
A1
12-15, 20, 24, 29-30, 33, 38, 40
A2
41-42
© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a
website, in whole or part. 23-3
e. Analyze and assess decisions made.
2. Both managerial and financial accounting information play
important role; accounting system provides primarily financial
based on historical amounts; however, relevant costs, or
avoidable costs, are especially useful.
or changed, and is irrelevant to future decisions.
b. Out-of-pocket cost requires future outlay of cash and
results from management’s decisions; is relevant.
Depreciation and amortization are not out-of-pocket costs.
c. Opportunity cost is potential benefit lost by taking specific
action when two or more alternative choices are available;
A. Additional Business
1. Effect on net income must be considered when deciding
website, in whole or part. 23-6
Chapter 23 Relevant Costing for Managerial Decisions
website, in whole or part. 23-7
Chapter 23: Alternate Demonstration Problem #1
Modern Company manufactures wood desks. They have the opportunity to
buy handles for the desks at $8 per unit. This purchase would affect costs
as follows:
Make Buy
Unit selling price: $340 $340
Volume (monthly) 500 500
Unit variable cost $ 95 $ 88
Price to purchase $ 0 $ 8
Fixed costs $5,500 $4,700
Decide whether the part should be made or purchased.
Chapter 23 Relevant Costing for Managerial Decisions
website, in whole or part. 23-8
Solution: Chapter 23 Alternate Demonstration Problem #1
Buy Make
Revenue $170,000 $170,000
Less:
