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USING THROUGHPUT
If question ask me to prepare pay off table using the throughput accounting then how should i prepare it because fixed cost are normally given in total….????
should i 1st calculate the total throughput for the each decision and then deduct the total factory cost from the throughput to prepare payoff table
i just trying to be sure what i am thinking is correct,sir
USING LIFE CYCLE COST
should i use average profit per unit of each decision decision (using life cycle) to prepare pay off table
Is there any possibility of combining Target costing and Risk and Uncertainty (payoff table,expected value)
A,B,C three production decision option
A : selling price $20, target profit 20%, expected value is $18
B : selling price $25, target profit 20%, expected value is $21
C : selling price $30, target profit 20%, expected value is $29and suppose question says company can only produce 1 of this product
demand and probability:
A : Demand 3000,2000,1000 probability 0.2, 0.3, 0.5
B : Demand 2500,2000,1500 probability 0.3, 0.3, 0.4
C : Demand 3500,1800,1200 probability 0.1, 0.7, 0.2Requirement : How do i Calculate this following things
1) Prepare a payoff table( should i use “target profit” or “selling price – expected cost” to prepare payoff table)
2) Is decision’s are to be taken based on expected values or maximin or maximax or minimax regret
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