Computer Science 1032A/B Chapter 4: Lecture 4-Managerial Accounting

• School: Western University
• Department: Computer Science
• Course: Computer Science 1032A/B
• Professor: Diane Goldstein

Document Summary

Depe(cid:374)ds o(cid:374) i(cid:373)porta(cid:374)(cid:272)e atta(cid:272)hed to: mo(cid:374)e(cid:455), leisure, fa(cid:373)e et(cid:272) Understand the factors that influence goals and their relative importance. Lecture 4: managerial accounting- decision making, cost classifications and performance. Decision: the choosing of one option from a set of options to achieve a goal. Tep 1: pe(cid:272)if(cid:455) the de(cid:272)isio(cid:374) pro(cid:271)le(cid:373), i(cid:374)(cid:272)ludi(cid:374)g the de(cid:272)isio(cid:374) (cid:373)aker"s goals. Some decisions involve a small number of options, while others have a large number. Critical for management to identify best options for analysis. Step 3: measure benefits (advantages) and costs (disadvantages) to determine the value (benefits reaped less costs incurred) of each option. Every option presents a unique trade-off between benefits and costs. Naturally, you will choose the option that maximizes value. Because value is the (cid:272)o(cid:374)tri(cid:271)utio(cid:374) of a(cid:374) optio(cid:374) to the de(cid:272)isio(cid:374) (cid:373)aker"s goals, (cid:449)e (cid:373)easure (cid:448)alue relative to the status quo, which is not doing anything at all.