SOC 25A/B Chapter Notes -Contribution Margin, High Bandwidth Memory, Fixed Cost
25 Nov 2013
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Document Summary
Identify and use relevant information in decision making. Lo2 analyze the quantitative and qualitative information used in keep and drop decisions. Lo3 analyze the quantitative and qualitative information used in outsourcing (make or buy) decisions. Lo4 analyze the quantitative and qualitative information used in special order decisions. Lo5 analyze the quantitative and qualitative information used in product emphasis and constrained resource decisions. Lo6 describe factors that affect the quality of operating decisions. These learning questions (q1 through q8) are cross-referenced in the textbook to individual exercises and problems. Future costs are relevant only if they differ between the decision alternatives. The confirmation bias is a tendency to seek and interpret information to affirm preconceptions. When faced with a special order decision, managers may have a preconceived idea about whether the order should be accepted or rejected. Then, the manager may put more weight on information that supports the preconceived viewpoint when interpreting financial and qualitative data.
