Economic decision making using cost data : a manager's guide / Daniel Marburger and Ryan Peterson.

Part of: 2013 digital library.

1. What does economics have to do with running a business? -- 2. What matters and what doesn't: relevant revenues and costs -- 3. Determining relevant revenues: understanding the buyer -- 4. What your cost accountant can't measure: the economic theory of production and cost -- 5. How accountants measure opportunity -- 6. Are you a better decision maker yet? -- Appendix I. Advantages and disadvantages of various cost accounting methods -- Appendix II. Relevant published case studies -- Notes -- References -- Index.

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A firm maximizes profits if each decision adds more to the firm's revenue than to its costs. Although the concept sounds rather simple, it is difficult to do in practice. Economic theory helps the decision-maker to accurately infer changes in revenues that may be associated with a decision. Similarly, economic theory suggests that the costs reported by accountants rarely reflect the true cost associated with the decision. The purpose of this book is to help managers understand how to assess the changes in revenues and costs. Demand and price sensitivity analysis allow managers to infer revenue changes. This book also reconciles the economic theory of cost with common accounting practices so the differences can be reconciled and better decisions can be made.

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Title from PDF title page (viewed on August 22, 2013).