Cost Actg notes.docx - 1 Identify the problem/uncertainties a Issue to resolve b Increase revenue(PxQ will affect price or quantity 2 Obtain information

Cost Actg notes.docx - 1 Identify the problem/uncertainties...

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1) Identify the problem/uncertainties a. Issue to resolve b. Increase revenue (PxQ) will affect price or quantity. 2) Obtain information a. Past, present (from customers & competitors), future projections 3) Make prediction about the future a. Determine alternatives for increasing revenue i. Increase Price by 1% ii. Don’t change price iii. Reduce P by 1% because quantity might go up (beware of bias) Review underlying assumptions 4) Make decisions by choosing among alternatives a. Based on strategies and goals b. Communicate decision These 4 steps are considered planning 5) Implement the decision, evaluate performance (compare actual results to plan), obtain feedback and learn to improve future decision making. Last step is the control function. Planning and control Planning consists of 1) Selecting an organization….. Product diff. & low cost. Strategies leads to goals 2) Predicting result under various alternative ways of achieving those goals 3) Deciding how to attain the desired goals, and 4) Communicating the goals and how to achieve them to the entire organization.
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