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Relevant Information for Decision Making: General Motors

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The company to be used is General Motors.

Time period used 2007-2008

Identify a decision that has recently been made or will be made in the near future in your organization. Identify two relevant and two non-relevant costs in this decision.

If you cannot identify specific actual amounts, make a reasonable estimate and apply the tool as if the data were factual.

Your report should include

The name and nature of the organization
The activity and time period you used
The inputs you used
Your results
Any implications from your results
This should be a one to two page report.

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Solution Summary

This response discusses the two relevant and two non-relevant costs in a decision at General Motors. It begins with a brief definition of relevant costs, and then uses an example of General Motors as well as a calculation of relevant cost per unit of a special order to conclude.

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As per Investopedia, "Relevant cost is used to describe costs that are specific to management's decisions. The concept of relevant costs eliminates unnecessary data that could complicate the decision-making process. Relevant costs are decision specific, meaning that a relevant cost may be important in one situation but irrelevant in another. Examples of when management uses relevant costs can be seen when it is ...

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