For my assignment I am using APPLE INC. My prior assignment was on BREAK-EVEN ANALYSIS and I used APPLE TV. I need assistance with the following:
Identify a decision that has recently been made or will be made in the near future at APPLE INC. Identify two relevant and two non-relevant costs in the decision.
If you cannot identify specific actual amounts, make a reasonable estimate and apply the tool as if the data were factual.
The report should include
- Name of activity
- activity and time period used
- the inputs you used
- your results
- any implicatons from your results
I used the following information for the sales of 1 million Apple TV's in a year:
Material Cost per unit $90
Labor Cost per Unit $110
Fixed overhead for the year $10,000,000
Sales revenue per unit $250
Please provide specific numerical information
Activity and time period used
The activity we have decided is of international expansion and to expand further into Indian market. This is because India i one of the fastest growing markets in world. This growth proves to be a large opportunity for multinationals.
Time period is within in one year. (Upto the year 2009)
An item is relevant if it is different between or among decision alternatives. That item is not relevant if it is the same between or among decision alternatives.
Here are some follow-up generalizations. As with all generalizations, there will always be exceptions.
1. In general, sunk costs are not relevant because they cannot be avoided in a decision. They have already been incurred or are committed to be incurred in the future. Remember that committed costs are a form of sunk costs.
2. In general, historical costs are not relevant because they will be the same regardless of ...
This explains the concept of relevant costs and its application in the organization