Final answer:
The cost-benefit approach is a guideline used by management accountants to provide value in strategic decision making. It involves comparing the costs and benefits of a decision. Management accountants use tools like Cost Benefit Analysis (CBA) to assist them in this process.
Step-by-step explanation:
The cost-benefit approach is a guideline used by management accountants to provide value in strategic decision making. It involves comparing the costs of a decision against the benefits to determine its value. This approach helps in making informed decisions by weighing the marginal costs (extra cost of adding a unit) against the marginal benefits (extra benefit of adding the same unit).
Management accountants use tools like Cost Benefit Analysis (CBA) to assist them in this process. CBA involves creating a T-shaped chart with costs on one side and benefits on the other. Costs refer to the sacrifices made in terms of money, effort, and other resources, while benefits are the gains resulting from the decision.
By using the cost-benefit approach, management accountants can evaluate the potential outcomes of different strategic decisions and choose the one that offers the greatest value.