ACC206B Ch.5

• (1) info must be an expected future revenue or cost
• (2) has an element of difference among the alternatives

any method used for making a choice

A costing approach that considers all indirect manufacturing costs to be product costs that become an expense in the form of manufacturing costs of goods sold only as sales occur.

A method of internal reporting that emphasizes the distinction between variable and fixed costs for the purpose of better decision making

because the fixed cost will always be the same every year regardless of how much is sold.

• Predatory Pricing - lowering to drive out competition (Walmart)
• Discriminatory Pricing - charging different prices to different customers

when you have significant control over the sale price: because it allows you to set a markup amount.

• When the market controls the Sale Price:
• You can then just figure in your desired profit.
• target price = market price - desired profit

because companies are becoming increasingly limited in influencing the market price.