Question

Which of the following is a guideline used by management accountants to assist in strategic and operational decision​making?

A. employing a supply chain approach
B. employing a regression approach
C. employing a six sigma approach
D. employing a​cost-benefit approach

Answer 1

Management accountants use a cost-benefit approach for decision-making by evaluating marginal costs and benefits, and comparing them in a structured format to guide strategic and operational decisions.

Step-by-step explanation:

A guideline used by management accountants to assist in strategic and operational decision-making is employing a​ cost-benefit approach. This involves comparing what you will sacrifice and what you will gain to help make a decision. Weighing marginal costs against marginal benefits is an extremely helpful process in decision-making. In a cost-benefit analysis, costs—which include money, effort, and other sacrifices—and benefits—which include gains in terms of money, time, experience, and other improvements—are contrasted against each other on a T-shaped chart for ease of comparison.

Using mathematical models to estimate costs is an integral part of this process. These models help predict costs for various solutions during the idea generation phase and allow for a thorough analysis of the linkage between the science or technology behind a technique and the cost of its implementation. Such costs need to be normalized to compare with other options effectively.

Decision-making can also involve identifying whether approaches are command-and-control, which are obligatory regulations that apply to all producers, or market-based, which use economic incentives to encourage desirable outcomes.

Answer 2

Management accountants use a cost-benefit approach for decision-making by comparing costs and expected benefits on a T shaped chart. Mathematical models are also employed to estimate and normalize costs for different approaches.

Step-by-step explanation:

To assist in strategic and operational decision​making, management accountants often employ a cost-benefit approach. This involves a process where the costs associated with a decision are compared against the expected benefits. The choices to be made are analyzed using a T shaped chart where costs are listed on one side, and the benefits on the other. Considerations include what one will sacrifice and what one will gain, such as money, effort, and other sacrifices versus gains like money, time, experience, and other improvements.

Management accountants might also use mathematical models to estimate the costs associated with different approaches and to normalize these for comparison. These models are particularly useful during the idea generation phase for predicting costs related to materials, fabrication, operation, and maintenance.