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+--- Thread: Fixed costs and resource constraints (/showthread.php?tid=7563)
Fixed costs and resource constraints - Omayr.ahmed - 03-10-2010
Q)Discuss how fixed costs and resources constraints might be tackled within short term decision making. Illustrate your answer with examples.
Your precious input will be appreciated.
- Sh.Mohsin - 03-13-2010
You may consult book of management accounting
- A.A - 03-13-2010
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by Omayr.ahmed</i>
<br />Q)Discuss how fixed costs and resources constraints might be tackled within short term decision making. Illustrate your answer with examples.
Your precious input will be appreciated.
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Fixed unattributable costs are not relevant for decision-making as they will be incurred regardless of the decision.Short term decisions are made according to the highest per unit contribution of limited resources.
For example,if there is a dearth of raw material and a company produces products A,B and C,all of which use the raw material,the company's short term decision about which product to produce and in what quantities depends on the product that has the highest contribution per kg.