Economic Decision Making Using Cost Data, livre ebook

A firm maximizes profits if each decision adds more to the firm’s revenue than to its costs. Although the concept sounds rather simple, it is difficult to do in practice. To ease this difficulty, the authors are giving you the inside knowledge to “economic theory.” This book will help you understand economic theory and much more to accurately infer changes in revenues that may be associated with a decision. And since economic theory suggests that the costs reported by accountants rarely reflect the true cost associated with the decision, this book will help you understand how to assess the changes in revenues and costs. Demand and price sensitivity analysis allow you to infer revenue changes, and this book helps you reconcile the economic theory of cost with common accounting practices so the differences can be reconciled and better decisions can be made.
List of Firms/Products ............................................................................ ix
Preface .................................................................................................. xi
Chapter 1 What Does Economics Have to Do with
Running a Business? .........................................................1
Chapter 2 What Matters and What Doesn’t:
Relevant Revenues and Costs..........................................13
Chapter 3 Determining Relevant Revenues:
Understanding the Buyer................................................25
Chapter 4 What Your Cost Accountant Can’t Measure:
The Economic Theory of Production and Cost..............47
Chapter 5 How Accountants Measure Opportunity ........................75
Chapter 6 Are You a Better Decision Maker . . . Yet?...................103
Appendix I Advantages and Disadvantages of Various
Cost Accounting Methods............................................109
Appendix II Relevant Published Case Studies...................................111
Notes .................................................................................................113
References ...........................................................................................117
Index .................................................................................................119