Relevant Costs – Managerial Accounting Decisions & Scenarios

Unlocking Effective Decision-Making: Mastering Relevant Cost Methods for Profitability & Long-Term Success

Created by: Robert (Bob) Steele
CPA, CGMA, M.S. Tax, CPI

What Will I Learn?

• Analyze the significance of relevant costs in decision-making, avoiding pitfalls and understanding their impact.
• Evaluate equipment investments using cost-benefit analysis techniques, considering future benefits and the sunk cost fallacy.
• Apply relevant cost analysis to assess the implications of accepting special offers for profitability and customer relationships.
• Determine make or buy decisions by evaluating relevant costs, quality control, and supply chain efficiency.
• Evaluate the profitability of processing products further versus selling at the current stage of production.
• Assess costs of scrapping defective inventory versus reworking it, considering salvage value and customer satisfaction.
• Optimize sales mix by analyzing relevant costs, demand patterns, and market trends.
• Evaluate segment viability through relevant cost analysis, considering financial performance and alignment with organizational goals.
• Utilize cost data to set sales prices effectively, employing cost methods and considering market dynamics and competition.

Requirements

• A solid foundation in accounting principles, including an understanding of financial statements, cost allocation methods, and basic financial analysis.
• Familiarity with managerial decision-making frameworks, such as cost-volume-profit analysis and relevant costing concepts.
• Competency in using spreadsheet software (e.g., Microsoft Excel, Google Sheets) for data analysis, including functions like summing, averaging, and creating basic formulas.
• An eagerness to learn and apply strategic decision-making techniques in a business context, with a focus on optimizing resources and driving long-term success.

Target audience

• Aspiring and current managers seeking to enhance their decision-making skills and improve their ability to drive profitability and long-term success in business.
• Entrepreneurs and business owners looking to make informed financial choices and optimize resource allocation.
• Professionals in finance, accounting, or related fields who want to deepen their understanding of relevant cost methods and their application in managerial decision-making.
• Undergraduate or graduate students studying business, accounting, finance, or related disciplines, who wish to supplement their academic learning with practical knowledge in strategic decision-making.
• Individuals interested in personal finance and making informed financial decisions, as the concepts covered in this course can be applied to personal financial management.
• Anyone seeking to enhance their analytical and critical thinking skills and apply them in a business context to make more effective decisions.