Question 1

Conflicts in the decision-making process can arise when superiors evaluate a manager's performance using a model consistent with the decision model used by the manager.

Accepted Answer

Conflicts in the decision-making process often arise when there is a mismatch between the evaluation model used by superiors and the decision model used by the manager, not when they are consistent.

Question 2

Future costs are irrelevant if they are the same under all feasible alternatives.

Accepted Answer

If the future costs are the same for all feasible alternatives, then they do not impact the decision-making process. Therefore, they can be considered irrelevant in the decision-making process.

Question 3

Joshua Company produces and sells a product that has variable costs of $7 per unit and fixed costs of $200,000 per year.If production increases from 20,000 units to 25,000 units,the total cost will ________.

Accepted Answer

The answer of Joshua Company produces and sells a product...

Question 4

A widespread problem in practice is that the decision model used by managers for ________ and the model used by their superiors in ________ are different.

Accepted Answer

The first blank refers to decision making, which is often done by managers. The second blank refers to performance evaluation, which is done by superiors. The two models used for decision making and performance evaluation may not always align, creating a disconnect between the decisions made and the evaluation of those decisions.

Question 5

Managers may be tempted to make decisions that are not in the best interests of the company because ________.

Accepted Answer

If performance measures in use reward managers for decisions that are not in the best interests of the company, they may be tempted to prioritize their own interests or short-term gains over the long-term success of the company.

Question 6

Since managers are usually evaluated based on the operating results in one year,they do not usually consider the long range impact of their decisions.

Accepted Answer

Managers are often more focused on short-term results and may not take into account the long-term consequences of their decisions, as they are evaluated based on their current year's performance.

Question 7

When analyzing alternatives,it is not advisable to use fixed costs per unit because a new fixed cost per unit must be calculated for every different volume of production.

Accepted Answer

Fixed costs do not change with changes in volume of production, and therefore using a fixed cost per unit would not accurately reflect the total fixed costs incurred at different production volumes. A new fixed cost calculation would need to be made for each production volume in order to accurately analyze alternatives.

Question 8

Generally,companies use aggregate measures of performance when conducting performance evaluations of managers.

Accepted Answer

Aggregate measures such as financial metrics, customer satisfaction ratings, and employee engagement scores are often used to evaluate the overall performance of managers in organizations. These measures provide a holistic view of the manager's impact on the company's success rather than focusing on individual tasks or behaviors.

Quiz 6: Relevant Information for Decision Making With a Focus on Operational Decisions