A number of terms are listed below:
Cost minimization
Differential cost
Full product costs
Incremental costs
Incremental revenue
Objective function
Opportunity cost
Optimization technique
Out-of-pocket costs
Outlay cost
Paralysis by analysis
Sunk costs
Profit maximization
REQUIRED
Select the terms from the above list to complete the following sentences. A full absorption cost refers to all manufacturing costs including all MOH, whereas a___________________ refers to all period or non-manufacturing costs as well as all manufacturing costs to bring the product to point of sale. The ____________________ is the value lost because a different alternative was not chosen. The __________________ and__________________ are the unique inflows and outflows arising from a specific alternative, should it be chosen. Similarly an ________________ arises from implementation of a specific alternative. In comparison, a differential cost is the savings or added costs that arise when comparing alternatives to the current state. At some point the choice must be made and frequently a management team can suffer ____________________ because they seek more and more information. There are some costs that are always irrelevant and one category is_____________ that have already been spent and cannot be recovered by making a different decision. One way to select an alternative is to use an ________________ called linear programming. Optimization under specific constraints on resources may target either in_______________ or ____________________. The technical name to calculate what will be optimized is the ________________.