05 Sep Accounting Tools and Measures for Decision Making- Part 1 The Better Chair Company is a large furniture designer, manufacturer, and retailer head
Account for Management Decision Making
Week 4 Assignment
Accounting Tools and Measures for Decision Making- Part 1
The Better Chair Company is a large furniture designer, manufacturer, and retailer headquartered in Country X. The company has just started manufacturing a new premium lounge chair at its new production division in Country X. The company also plans to internally sell the chair to its overseas retail division in Country Y. Additionally, the company is considering another new product, an ottoman. You have been hired as a consultant to help the new divisional management team make some decisions affecting these products by using managerial accounting information. You have also been asked to explain to them how this information can be utilized to make good managerial decisions. You are to provide your findings and recommendations in a series of three business reports, to be submitted during the next 3 weeks.
To prepare for this Assignment:
- Download the Week 4 Assignment Template.
Submit your 3- to 4-page (excluding title page and references) completed business report that addresses the following:
After your initial meeting with the management team members and assessing their level of experience with managerial accounting, you have decided to provide some starting information on the various types of costs utilized in managerial accounting. Your purpose in providing this information is to give the necessary context to the new management team to enable them to fully understand the accounting information and recommendations you will provide in your final report. Be sure to address the following:
- Explain sunk cost, opportunity cost, and accounting cost, and provide three examples of each.
- Explain how each of these costs relates to developing managerial accounting information required for decision making.
- Summarize why a manager should understand these concepts, providing an example to support your rationale.
- Explain the differences between fixed and variable costs and provide three examples of each type of cost.
- Summarize the importance of managers to classify these costs correctly, including how the correct classification can inform decision making.
Account for Management Decision Making
Week 4 Learning Resources
Costs
There are many different types of costs that impact a manager’s decision making. Therefore, it is imperative that managers understand what each type is as well as the ones relevant to a specific decision. In these resources, you will examine different types of costs.
· Franklin, M., Graybeal, P., & Cooper, D. (2019). 2.2 identify and apply basic cost behavior patternsLinks to an external site. . In Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/2-2-identify-and-apply-basic-cost-behavior-patterns
· Franklin, M., Graybeal, P., & Cooper, D. (2019). Why it mattersLinks to an external site. . In Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/10-why-it-matters
· Franklin, M., Graybeal, P., & Cooper, D. (2019). 10.1 identify relevant information for decision-makingLinks to an external site. . In Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/10-1-identify-relevant-information-for-decision-making
· Hultman, J. A. (2021, February). Know your relevant costs before making financial decisionsLinks to an external site. . Podiatry Management, 40 (2), 134–138.
· Walden University, LLC. (2024). Cost considerations for accounting decision making Download Cost considerations for accounting decision making [PDF]. Walden University Canvas. https://waldenu.instructure.com
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Week 4 Assignment: Accounting Tools and Measures for Decision Making—Part 1
Prepared by: Replace this text with your name.
Date: Replace this text with the submission date.
Walden University
MBAX 6050: Accounting for Management Decision Making
Sunk Costs, Opportunity Costs, and Accounting Costs – Fixed and Variable
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References
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Include appropriately formatted references to support your Assignment. Refer to the Assignment guidelines for further information on the requirements.
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