The Sea is Getting Rough: Analysis of Incremental Costs during the Pandemic
Main Article Content
Abstract
This teaching case aims to understand how incremental cost analysis can be applied in decision-making. The case portrays a fishing company in the segment that suffered a disruption in demand from the international market as a result of the COVID-19 pandemic. Its managers, who already acted to mitigate previous financial problems, now need to decide how to dispose of fish production during the pandemic. The case encourages the development of analytical competence on the impact of a rupture in demand, the identification of relevant costs for decision-making from an income statement, and managerial decision-making based on incremental cost analyzes. This case, based on interviews and estimated accounting data, was designed for undergraduate and graduate courses focused on costs in the areas of Business and Accounting.
Download data is not yet available.
Article Details
This work is licensed under a Creative Commons Attribution 4.0 International License.
Since mid-February of 2023, the authors retain the copyright relating to their article and grant the journal RAC, from ANPAD, the right of first publication, with the work simultaneously licensed under the Creative Commons Attribution 4.0 International license (CC BY 4.0), as stated in the article’s PDF document. This license provides that the article published can be shared (allows you to copy and redistribute the material in any medium or format) and adapted (allows you to remix, transform, and create from the material for any purpose, even commercial) by anyone.
After article acceptance, the authors must sign a Term of Authorization for Publication, which is sent to the authors by e-mail for electronic signature before publication.
References
Atkinson, A. A., Kaplan, R. S., Matsumura, E. M., & Young, S. M. (2011). Management accounting: Information for decision-making and strategy execution (6 ed.). New York: Pearson Education.
Chenhall, R. H., & Langfield-Smith, K. (1998). The relationship between strategic priorities, management techniques and management accounting: An empirical investigation using a systems approach. Accounting, Organizations and Society, 23(3), 243-264. https://doi.org/10.1016/S0361-3682(97)00024-X
Chimenti, P. C. P. de S. (2020). Reflections on memorable teaching cases. Revista de Administração Contemporânea, 24(5), 376-379. https://doi.org/10.1590/1982-7849rac2020200102
Craighead, C., Blackhurst, J., Rungtusanatham, M., & Handfield, R. (2007). The severity of supply chain disruptions: Design characteristics and mitigation capabilities. Decision Sciences, 38(1), 131–156. https://doi.org/10.1111/j.1540-5915.2007.00151.x
Duxbury, D. (2012). Sunk costs and sunk benefits: A re-examination of re-investment decisions. The British Accounting Review, 44(3), 144–156. https://doi.org/10.1016/j.bar.2012.07.004
Food and Agriculture Organization. (2020). FAO yearbook. Fishery and aquaculture statistics 2018. Rome: FAO. https://doi.org/10.4060/cb1213t
Haita-Falah, C. (2017) Sunk-cost fallacy and cognitive ability in individual decision-making. Journal of Economic Psychology, 58, 44–59. https://doi.org/10.1016/j.joep.2016.12.001
Jiambalvo, J. (2007). Managerial accounting (3 ed.). New Jersey: Wiley International Editions.
Keefer, Q. A. W. (2019). Decision-maker beliefs and the sunk-cost fallacy: Major League Baseball’s final-offer salary arbitration and utilization. Journal of Economic Psychology, 75(Part B), 102080. https://doi.org/10.1016/j.joep.2018.06.002
Moritz, B. (2020). Supply chain disruptions and COVID-19. Supply Chain Management Review, 27(3). Retrieved from https://www.scmr.com/article/supply_chain_disruptions_and_covid_19
Noreen, E. W., Brewer, P. C., & Garrison, R. H. (2011). Managerial accounting for managers (2 ed.). New York: McGraw-Hill Irwin.
Porter, M. E. (1985). The competitive advantage: Creating and sustaining superior performance: With a new introduction. New York: Free Press.
Scheibe, K. P., & Blackhurst, J. (2018). Supply chain disruption propagation: A systemic risk and normal accident theory perspective. International Journal of Production Research, 56(1-2), 43-59. https://doi.org/10.1080/00207543.2017.1355123
Shank, J. K., & Govindarajan, V. (1997). A revolução dos custos: Como reinventar e redefinir sua estratégia de custos para vencer em mercados crescentemente competitivos (2 ed.). Rio de Janeiro: Campus.
Warren, C. S., Reeve, J. M., & Fess, P. E. (2008). Contabilidade gerencial (2 ed.). São Paulo: Thomson Learning.