Cost Accounting

Decision Making and applicable study Five-Step Decision-Making Process ? A decision physical body is a formal mode of making a choice, ofttimes involving both quantitative and qualitative analyses. ? Managers often use around variation of the Five-Step Decision-Making Process. Step 1: Obtain randomness Step 2: Make Predictions About proximo Costs Step 3: issuing in An Alternative Step 4: Implement The Decision Step 5: evaluate Performance Feedback ? Much of this chapter focuses on Choosing an alternative. ? The concept of relevance willing be largely used for this stage. The concept of Relevance ? applicable Information has two characteristics: ? It occurs in the coming(prenominal). ? It differs among the alternatives being considered. ? applicable Revenues (Costs). ? anticipate future revenues (costs) that differ among the alternatives. ? If they ar non different among alternatives, they be not relevant. ? Something happened in the past is not relevant. ? Past costs argon not relevant change posture cost because they are not avoidable and cannot be changed no way out what action is taken.

? Quantitative and qualitative Relevant Information ? Quantitative factors are outcomes that are metric in numerical terms ? both pecuniary ( expressed in monetary terms) and non-financial (not expressed in monetary terms, but can be vizord numerically). Employee morale ? Qualitative factors are outcomes that are difficult to measure in numerical terms ? ? Relevant-cost analysis generally emphasizes quantitative factors. Relevant Information Illustration (Exhibit 11-2) both alternatives: 1. Do not reorganize, 2. blast around Reorganize style that a) fires 5 material handling workers (to reduce project costs) & b) leases new(a) machine Quantitative (mainly financial) analysis. Qualitative factors ? disallow effect on employee morale of laying off employees. Types of Decisions ? especial(a) Orders (One-Time-Only) ? Make or subvert (Insourcing vs....If you want to get a full essay, range it on our website: Ordercustompaper.com

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