# Ch 9: Decision Making in Managerial Accounting

The brief video and informative text lessons in this chapter are designed to teach you about decision making in managerial accounting. When you finish a lesson, check out the quizzes to practice before you move on.

## Decision Making in Managerial Accounting - Chapter Summary and Learning Objectives

Accounting managers must make many decisions in their work. In order to take the right course of action, managers must be well informed and prepared. Having a grasp on decision making tools and processes can help. The instructors in this chapter will cover how to use decision making tools and follow procedures. After finishing these lessons, you may choose to complete a quiz to measure your comprehension. This chapter covers topics including:

• The main decision making tools managers must know
• Organizational decision making processes
• Important terminology for decision making
• How to identify variable, fixed and mixed costs
• When to use an incremental analysis
• Ways to identify relevant costs
• Using relevant costs to make decisions

Lesson Objective
Quantitative Decision Making Tools: Decision Trees, Payback Analysis & Simulations Summarize the three main decision making tools used by managers.
The Decision Making Process for Organizations Evaluate the formal decision making process, and why it is key for managers.
Decision Making for Managers: Certainty, Risk & Uncertainty Conclude how certainty and risk are used to make informed decisions.
Sunk Costs: Definition & Examples Calculate sunk costs and examine examples.
Opportunity Cost: Definition, Calculations & Examples Explain the concept of opportunity cost and learn its calculations.
Differential Cost in Managerial Decision Making Dissect differential cost to better understand how to calculate and use it in decision making.
Implicit Costs: Definition & Examples Differentiate implicit costs from explicit costs.
Identifying Fixed Costs & Variable Costs for Producers Consider the concepts of variable and fixed costs.
Mixed Costs: Definition & Examples Illustrate examples of mixed costs, and examine their relation to fixed and variable costs.
Incremental Analysis: Definition & Examples Categorize which decisions would be made using incremental analysis, and learn how to use it to make a decision.
Identifying Relevant Costs in Accepting an Order Assess the relevant costs in the process of accepting an order.
Impact of Relevant Costs on Make-or-Buy Decisions Calculate relevant costs, and learn the effect they have on make-or-buy decisions.
Relevant Costs to Selling or Processing Materials Further Explain the calculations involved in making decisions about single-products or multiple-products.
Relevant Costs to Repair, Retain or Replace Equipment Defend the decision to repair, retain or replace equipment.
Relevant Costs in Eliminating a Product or Segment Compose an incremental analysis to determine whether or not to eliminate a product or segment.

13 Lessons in Chapter 9: Decision Making in Managerial Accounting
Test your knowledge with a 30-question chapter practice test
Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
Not Taken
Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
Not Taken

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