(14,000,000)

Relevant costs required in making tactical decisions. Before del monte international discussing relevant costs, it is necessary to note what is meant by the decision and how to make a decision. del monte international Decision is set one option among several alternatives to choose from. Before deciding on the alternatives del monte international the decision maker must consider or compare the benefits and disadvantages of each alternative. del monte international Alternatives that provide greater benefit would be an alternative option. Benefits and losses can be calculated by taking into account the costs that would likely happen if you choose an alternate. Expenses incurred if you choose alternative A would be different from the costs incurred if you choose alternative B, or C, and so on. These costs are called relevant costs because it is relevant to consider in making a decision. Thus, the relevent costs are future costs (not the case) that differ in each alternative.
The manager of a manufacturing company is considering replacing old machines with new machines. del monte international Before making the decision to replace with a new machine or maintain the old machine, the manager calculates the costs and net income that might be obtained if you choose one of the alternatives.
Total cost and Revenue - for 4 years
(14,000,000)
Based on the above data, the best decision is to buy a new machine because it will bring higher profits to Rp 700,000,000 for the next four years. Different costs (differential costs) for choosing one alternative, namely: (1) variable expenses, (b) Depreciation of new engine, and (c) the disposal value of the old machine is the relevant costs or expenses which are considered relevant for deciding whether del monte international maintaining del monte international the old engine or will purchase a new engine.
Costs What are the relevant costs? Ie all the costs that can be controlled. Costs that can be controlled is called avoidable cost. Avoidable costs are the costs that can be eliminated (in whole or in part) due to the decision to choose one alternative. All costs can be included del monte international as an avoidable cost except: Sunk Costs, the costs that have occurred that can not be avoided anymore. For example, depreciation expense. The old machine depreciation expense (see table above Rp 14 million) are not controlled or can not be eliminated even though the old machine is not used anymore because it chose to buy a new machine. Future Costs were not different between the two alternatives, namely del monte international the future costs that will still happen at any alternatives that cost dipilih.Future there are two: not a relevant cost and the relevant cost.
Avoidable costs can be interpreted together with the differential costs. This can be seen in the table above. If you decide to buy a new machine will be eliminated then the variable costs of Rp 18,000,000, -. Conversely, if elected to retain the old machine to the new machine depreciation expense amounting to Rp. 20 million is not going to happen. Both of these costs are avoidable (differential) costs.
PT. Indofood intends to add to its line of products in the form of instant noodle cups. For glass packaging instant noodles, PT. Indofood consider whether the glass packaging made themselves or bought from other companies. The data above the cost of both alternatives to the amount of 20,000 pieces of glass packaging as follows:
0
7,000,000
The above analysis shows that buying glass packaging it costs Rp 5,000,000 cheaper than making its own. Thus managers will decide to buy from in making their own glass packaging.
After several years of producing instant noodles cup, manager of PT Indofood concerned about the viability of this product line. From time to time sales slumped to a loss. Manager of PT Indofood eventually consider stopping instant cup noodle products. To decide whether to continue or discontinue, managers need estimates of income next year. The following year based on the projected sales can be prepared following the estimated income for the year as follows:
(339 000 000)
(27,000,000)