CVP decisions: make or buy, closing a segment, special orders, sensitivity and capacity

What this note covers

1. Relevant costs: the starting point for every short-term decision
2. Make or buy decisions
3. Closing a department or dropping a segment
4. Special order decisions
5. Capacity constraints and their effect on the special order decision
6. Sensitivity: how fragile is a short-term decision?
7. How short-term decisions are examined and what separates a top response

7 sections · 11 key terms & formulas · 6 common mistakes