- Contribution analysis (and related CVP analysis): http://en.wikipedia.org/wiki/Contribution_margin
- Relevant cost analysis: http://hafeezrm.hubpages.com/hub/Managerial-Accounting-Decision-Making-Relevant-Costs-Benefits
Basically, in the short-run, some of the items of cost in a decision-situation are fixed and they can be unavoidable whatever decision options you are to adopt. In this case, such items of cost are irrelevant for decision-making with a short-run perspective.
I also need to point out that short-run decisions, e.g. in pricing, can have long-run impacts. Thus, best decision option from a short-run perspective (e.g. ability to gain maximum total contribution), can be suboptimal from a long-run perspective (e.g. optimal pricing from a short-run perspective can harm the a company's product positioning with negative consequence to the business in the long run).
Students are encouraged to pay attention to this line of reasoning when studying the subject of Strategic Management Accounting. Students should also note that linear programming and throughput accounting also adopt a short-run perspective in decision making.
References
- On relevant cost: http://en.wikipedia.org/wiki/Relevant_cost
- On avoidable cost: http://www.investopedia.com/terms/a/avoidable-cost.asp#axzz29vOQoQJy
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