Final answer:
The five-step decision process involves planning and control activities, useful for organizations when making decisions and not exclusive to management accountants. It is guided by cost/benefit analysis, which helps determine if the benefits of a decision outweigh the costs. The correct option is A.
Step-by-step explanation:
The five-step decision process frequently involves planning and control activities, which enables organizations and their managers to make well-informed decisions. Although it could be associated with the work of management accountants, it is a universally applicable approach and is not exclusive to those professionals. When deciding whether to utilize this process, the costs and benefits must be carefully weighed. Essentially, this involves a cost/benefit analysis, where marginal costs—the additional cost of producing one extra unit—are measured against the marginal benefits—the additional advantage of producing the same unit. This analysis employs a T-shaped chart to contrast the two against each other, with costs on one side and benefits on the other, to support effective decision-making.
Furthermore, the five-step decision process does not have to follow GAAP guidelines, as it is a general management process rather than a financial reporting standard. The cost/benefit analysis is one of the vital tools that contribute to this process, helping to determine whether the benefits of a decision outweigh the sacrifices.