DECISION MAKING
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Advanced Business and Financial Management — CAIIB.
One-liners from this chapter
Free sample — 8 of 50 rapid-fire Q&A cards.
Fixed — Behaviour / Decision-Relevance / Example?
Behaviour: Constant in total; Decision-Relevance: Usually irrelevant in short run; Example: Rent, salaries
Variable — Behaviour / Decision-Relevance / Example?
Behaviour: Varies with volume; Decision-Relevance: Relevant; Example: Raw material
Semi-variable — Behaviour / Decision-Relevance / Example?
Behaviour: Mixed; Decision-Relevance: Split & treat parts separately; Example: Electricity
Sunk — Behaviour / Decision-Relevance / Example?
Behaviour: Already incurred; Decision-Relevance: Always irrelevant; Example: Past R&D
Opportunity — Behaviour / Decision-Relevance / Example?
Behaviour: Forgone benefit; Decision-Relevance: Always relevant; Example: Lost contribution
Differential — Behaviour / Decision-Relevance / Example?
Behaviour: Incremental; Decision-Relevance: Always relevant; Example: Extra labour for special order
Treatment of fixed cost — Marginal Costing / Absorption Costing?
Marginal Costing: Period cost; charged in full; Absorption Costing: Absorbed into product cost
Stock valuation — Marginal Costing / Absorption Costing?
Marginal Costing: At variable cost only; Absorption Costing: At full cost
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