Cost Analysis for Decision Making - Essay Example

Extract of sample
Cost Analysis for Decision Making

will continue making the containers and performing maintenance.)  Alternative B: Liquid Chemical Co. will continue making the containers, but it will outsource the maintenance to Packages, Inc.  Alternative C: Liquid Chemical Co. will buy containers from Packages, Inc., but it will perform the maintenance.  Alternative D: It is completely outsourced. Packages, Inc. will make the containers and provide the necessary maintenance Alternative A: In case if Liquid Chemical Company opt this alternative in which it will continue to make containers and performing simultaneously, the company will have to incur all the necessary costs as all those costs would be relevant costs needed to make and maintain the current production. Relevant costs pertaining to this particular alternative are full material costs amounting to $500,000, full labor cost which includes cost of supervisors and workers amounting to $500,000 cumulatively. Moreover, the full departmental costs of Dyers’ that amounts to $358,000 would also be a part of this alternative. Overall, this alternative would incur $1,717,000. The costs that are not relevant to this particular alternative are contract costs to Packages Inc in relation to maintenance and container, severance cost and pension cost. The advantage of this alternative is that the company will have control over its production pattern, job security of Dyer’s departmental workers etc. ...
Download paper


Part (a): Discuss each of the four alternatives outlined above. Identify the relevant costs (including amounts) for each of the four alternatives, and explain why these costs are relevant to the decision. Identify any costs that are not relevant, and explain why they are not relevant…
Author : nat47
Download 2

Related Essays

Simon Everly PLC Financial analysis and decision making
10 pages (2510 words) Essay
Ration Analysis in Decision Making
4 pages (1004 words) Assignment
The Foreign Corrupt Practices Act
7 pages (1757 words) Research Paper
Accounting Information in Decision Making
4 pages (1004 words) Essay
Cost and Decision-Making Analysis
5 pages (1255 words) Assignment
management accounting & decision making
8 pages (2008 words) Essay
Accounting and Decision Making
6 pages (1506 words) Essay
Accounting For Decision Making
9 pages (2259 words) Essay
FIN Unit 3 DB SA
1 pages (251 words) Essay
Got a tricky question? Receive an answer from students like you! Try us!