Decision Making – Dani Ki Costing – CA Final Video Lectures


Decision Making – Dani Ki Costing – CA Final Video Lectures

Decision Making – Dani Ki Costing – CA Final Video Lectures | Decision Making – Dani Ki Costing – CA Final Video Lectures | Decision Making – Dani Ki Costing – CA Final Video Lectures

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Dani Ki Costing
Final Video Lectures
Decision Making
Lecture 1

Lecture 2
Lecture 3

Lecture 4

Lecture 5
Lecture 4

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Decision Making

Decision Making is inevitable for any business organization whether small or large. The process of production, selling and distribution activities, strategy making etc differs from organization to organization. So there are different cost structures for different types of business. For decision making purpose different cost concepts are used and for that purpose costs are classified in two type’s viz. Relevant Costs and Non – Relevant Costs.
Relevant costs are the costs which are going to occur in the future and it is different in all the alternative actions taken. While those costs are non – relevant which are historical or sunk costs, the variable expenses and fixed expenses which are constant for every alternative action etc. Many times dilemma occurs in deciding whether the book value of the equipment is relevant or irrelevant.
Another concept considered in decision making is opportunity cost. Opportunity cost is the value of the foregone opportunity which might have occurred if the same opportunity was accepted and utilized. Opportunity cost is helpful to management in taking decision of which opportunity to be selected and which is most profitable for the organization. This is a very famous cost concept used in decision making to decide the earning base of the business by selecting most profitable alternative from the opportunities available.

Other costing concepts used for decision making are notional costs, avoidable costs, historical costs, Sunk Costs, Out of Pocket Costs, Discretionary Costs, Committed costs, Shut down Costs, Engineered Costs and many other lots of concepts. Decision making can be applied for different purposes like taking decision whether to accept the offer or not, should continue or discontinue a product etc.


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