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For APPLE. Identifying three relevant ,nonrelevant cost

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Good day. I need assistance applying this application below to Apple. I already applied it to an LCD plant but I want to make sure I am on the right track and looking for another example for an better understanding. Please provide at least 2-3 pages and 2-3 references ,so I can compare products to ensure my interpretation is correct.

For APPLE. Assist in Identifying three relevant and three non-relevant costs and set up a table to present the information and then discuss the information.

Include the following and f you cannot identify specific actual amounts, make a reasonable estimate and apply the tool as if the data were factual. Estimates should be reasonable, justified and documented.

Please include; the activity and time period you used; the inputs you used, the results and any benefits and implications from the results.

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Solution Summary

Your tutorial is 623 words and three references, discussing a research and development project. It shows you three relevant and three relevant costs and discusses the general rule and the specific examples.

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Company: Apple
Project is based on the strategy found in Apple's 2010 Form 10-K:

"The Company believes continual investment in research and development is critical to the development and enhancement of innovative products and technologies. In conjunction with its strategy, the Company continues to build and host a robust platform for the discovery and delivery of third-party digital content and applications through the iTunes Store." (page 1)

Apple has a number of decisions that might have relevant versus non-relevant costs. Relevant costs are those that will change between alternatives. Non-relevant costs are those that will not be incurred because of a decision or are already sunk (incurred) and therefore cannot be changed by a future decision.

If the decision is a capital purchase - for an asset that is to serve over many periods - the typical relevant costs would be the cost of the new machine, the proceeds from selling the old machine, tax impact of selling the old machine, the after-tax different in depreciation between the two machines and any new revenues or costs ...

Solution provided by:
Carol Sargent, PhD
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  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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