Management and Organizational Studies 1023A/B Lecture 4: MOS Notes for lecture 4

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 1023A/B
• Professor: Maria Ferraro

Document Summary

Lecture 4: managerial accounting- decision making , cost classifications and performance evaluation. Text: accounting information for decision making pg 102-120. Decision= choosing of one option from a set of options to achieve a goal: specify the decision problem, including the decision maker"s goals. Individuals frequently differ in the factors they consider and the importance they attach to these factors. Differences in goals often lead individuals to make different choices even when confronted with the same choices. When a large # of options are involved, we narrow the options to a manageable : measure benefits (advantages) and costs (disadvantages) to determine the value (benefits reaped less costs incurred) of each option. Measured relative to the status quo, which is not doing anything at all. Need not to be in monetary units (e. g. can be in terms of leisure time, convenience, or simply feeling good) although businesses typically measure value and opportunity cost in terms of money and profit.