Pregunta:
Why are joint costs irrelevant for decision making?
Autor: Hjalmer PedersenRespuesta:
The costs incurred up to the split-off point are past costs, hence they are sunk costs. Sunk costs mean that these costs were incurred anyways and are therefore irrelevant to the decision to sell a joint (or main) product at the split-off point or to process it further. Decision making is forward-looking, and we must therefore focus on the future-oriented alternatives.
0 / 5 (0 calificaciones)
1 answer(s) in total