Compare and contrast different ways to describe cost behavior
Describe the process used to estimate future costs
Discuss how cost estimates are used in decision making
3.2 Action Required:
Watch the short video in the following link:
3.3 Test your Knowledge (Question):
Define the term “cost behavior.” Discuss the various ways to describe cost behavior.
Cost Management
Measuring, Monitoring, and Motivating Performance
Chapter 1
The Role of Accounting Information in
Management Decision Making
© John Wiley & Sons, 2011
Chapter 1: The Role of Accounting Information in Management Decision Making
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 1
Chapter 1: The Role of Accounting Information in
Management Decision Making
Learning objectives
?Q1 – What is the process of strategic management and
decision making?
?Q2 – What types of control systems do managers use?
?Q3 – What is the role of accounting information in strategic
management?
?Q4 – What information is relevant for decision making?
?Q5 – How does business risk affect management decision
making?
?Q6 – How do biases affect management decision making?
?Q7 – How can managers make higher-quality decisions?
?Q8 – What is ethical decision making, and why is it
important?
© John Wiley & Sons, 2011
Chapter 1: The Role of Accounting Information in Management Decision Making
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 2
Q1: Organizational Vision and Core Competencies
• The organizational vision is the core purpose and
ideology of the organization.
• Determining the organizational vision precedes all
other management decision making.
• Management must also isolate the organization’s
core competencies – its strengths relative to
competitors.
© John Wiley & Sons, 2011
Chapter 1: The Role of Accounting Information in Management Decision Making
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 3
Q1: Organizational Vision and Core Competencies
Organizational