19and20_Overheads - Objectives for today and next class...

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1 ACC 333 (Far el ) 1 Objectives for today and next class Identifying relevant information for decision- making – Reminder on decision-making steps, information – Identifying relevant information – Common types of managerial decisions Adding constraints to decisions – What are constraints and why do we care? – How do constraints affect decisions & control systems? The theory of constraints – Analyze more decisions to identify constraints and their impact on choice ACC 333 (Far el ) 2 Reminder: Decision-making steps, information There is no “one way” to compute costs for management decision-making purposes "Costs" depends on the intended use of the cost estimate – What decision are you making? – What's the cost objective? Even for the same decision, there are multiple mathematical ways to analyze alternatives – e.g., Total versus differential approaches ACC 333 (Far el ) Fal 2011, Class 14 3 Reminder: Decision-making steps, information (continued) Use a step-by-step process 1) Recognize and define the decision problem 2) Identify all possible alternative solutions Then eliminate those that aren't feasible 3) Gather relevant information on predicted costs & benefits for each alternative 4) Do a quantitative analysis with this information Consider how sensitive analyses are to changes in estimates 5) Compare the analyses across the alternatives Consider qualitative factors that were not included elsewhere Consider whether choices are compatible with firm goals 6) Select the alternative with the greatest net benefit
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2 ACC 333 (Far el ) Fal 2011, Class 14 4 Reminder: Decision-making steps, information (continued) Consider information needed Quantitative or qualitative? – Try to quantify qualitative factors & incorporate into analyses in Step 4 – Otherwise, consider in Step 5 Consider constraints and incorporate into analyses – Capacity, time, market factors Characteristics of the information – is it: –T im
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This note was uploaded on 03/19/2012 for the course ACCACC 333 taught by Professor Anne during the Fall '11 term at Miami University.

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19and20_Overheads - Objectives for today and next class...

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