HOT Topic Paper

Please share a current article information (newspaper, magazine, website, etc.) found outside of class related to the objectives covered during class.

 

Please write at least 400 words and apply concepts and teachings from the weekly readings.

 

Topics for this week were the following:

  

·        

Management’s decision-making process

o   

To be effective, the decision-making process should be systematic and based on timely and relevant information.

o    The decision-making process includes the following four steps, each of which depends on timely information from accountants:

·         Identify the problem and assign responsibility for resolution.

·         Determine and evaluate possible courses of action.

·         Make a decision (Note. A nondecision is a decision to do nothing – status quo.)

·         Review results of the decision.

·         Incremental analysis

o    Incremental analysis is a time-saving tool for decision making. It leads to timelier and often better decisions. The incremental analysis approach isolates relevant information—costs and revenues that are impacted by the decision—and uses this information to compare alternatives and make the most profitable decisions.

o    Examples of decisions best made through incremental analysis include:

·         Accept an order at special price decisions.

·         Make-or-buydecisions.

·         Sell or process further decisions.

·         Retain or replace equipment decisions.

·         Eliminate an unprofitable segment decision.

·         Allocate limited resources decisions.