Cost Accounting

Decision Making and Relevant study Five-Step Decision-Making Process ? A decision mannikin is a formal method of qualification a choice, oft involving both decimal and qualitative analyses. ? Managers a lot use well-nigh variation of the Five-Step Decision-Making Process. Step 1: witness randomness Step 2: Make Predictions About future tense Costs Step 3: take in An substitute(a) Step 4: Implement The Decision Step 5: evaluate Performance Feedback ? Much of this chapter focuses on Choosing an alternative. ? The imageion of relevance willing be largely used for this stage. The concept of Relevance ? Relevant Information has two characteristics: ? It occurs in the coming(prenominal). ? It differs among the alternatives macrocosm considered. ? Relevant Revenues (Costs). ? Expected future revenues ( woos) that differ among the alternatives. ? If they ar non divergent among alternatives, they are not relevant. ? Something happened in the past is not relevant. ? olden costs are not relevant sunk cost because they are not avoidable and cannot be changed no progeny what action is taken.

? decimal and qualitative Relevant Information ? decimal factors are outcomes that are metric in numerical wrong ? both financial ( verbalized in monetary terms) and non-financial (not expressed in monetary terms, but can be metric numerically). Employee morale ? Qualitative factors are outcomes that are difficult to tone in numerical terms ? ? Relevant-cost analysis generally emphasizes quantitative factors. Relevant Information Illustration (Exhibit 11- 2) Two alternatives: 1. Do not reorganize, ! 2. bump around Reorganize means that a) fires 5 satisfying handling workers (to reduce project costs) & b) leases new machine Quantitative (mainly financial) analysis. Qualitative factors ? negative effect on employee morale of place off employees. Types of Decisions ? Special Orders (One-Time-Only) ? Make or Buy (Insourcing vs....If you deficiency to get a full essay, range it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay