Management decision making, Managerial Accounting

  • Decision-making is an integral part of all management functions. It is the process of choosing the among alternative courses of action. Managers have to spend a considerable amount of time and thought in making decisions. 

  • Costs, which affect the managerial decisions, are called relevant costs. All types of costs are not relevant. Only the costs, which are futuristic in nature and differ among alternatives, are considered as relevant costs. 

  • Differential cost analysis or differential costing is a special technique to help management to take decision. It shows how costs and revenues would be different under different alternative courses of action.

  • With the help of a technique like marginal costing, CVP analysis and differential analysis, management makes decisions like determination of profitable levels of production, make or buy, process or sell, purchase or lease, accept or reject new orders etc.

 

 

Posted Date: 8/30/2012 1:50:35 AM | Location : United States







Related Discussions:- Management decision making, Assignment Help, Ask Question on Management decision making, Get Answer, Expert's Help, Management decision making Discussions

Write discussion on Management decision making
Your posts are moderated
Related Questions
Objective Function Although the standard LP model can be either the maximization or the minimization type, it is sometimes useful to convert one form to the other. The maximiz

How to solve a Time Series problem for a five year period

The production department has been investigating possible ways to trim total production costs. One possibility currently being examined is to make the paint cans instead of purchas

Outline Five characteristics of relevant cost

C-V-P ANALYSIS – MULTIPLE PRODUCTS The simple product CVP analysis can be extended to handle the more realistic situations where the firm produces more than one product. The o

The case of variable quantity discounts In practice, suppliers may offer different discounts for different quantities purchased. For illustration:    Segment        Quantity

Calculate Transfer Price - Management Control System? Question: Compute the Transfer Price for Product X and Y and the Standard Cost of Product Z as the intra company pricing r


First Cut Analysis of Costs The allocation of costs and assets will produce a value chain that illustrates graphically the distribution of a firm's costs. It can prove reveali

What the traffic can bear pricing Pricing based on what the traffic can bear is not a sophisticated method. It is used by retail traders as well as by some manufacturing firms.