Question 1

In considering whether to produce a single product,the associated direct materials and direct labor costs would probably be ________.

Accepted Answer

Direct materials and direct labor costs are both quantitative factors that are directly relevant to the decision of whether to produce a single product or not. These costs will have a direct impact on the profitability of producing the product, making them important factors to consider in the decision-making process.

Question 2

In determining whether to purchase a labor-saving machine,extreme resistance to the machine by employees would be a(n)________.

Accepted Answer

The extreme resistance to the machine by employees is a relevant qualitative factor because it can have an impact on productivity and the overall success of the investment. It is important to consider the potential resistance from employees and how it can be addressed before making a decision to purchase a labor-saving machine.

Question 3

Precise but irrelevant information may still be useful for decision making.

Accepted Answer

False

Question 4

In the decision-making process,the accountant's primary role is ________.

Accepted Answer

The accountant's primary role in the decision-making process is to provide relevant information to support the decision-making process. While the accountant may offer insights and recommendations based on their analysis, the ultimate decision is typically made by the department or individual responsible for the decision. The accountant's contribution is to provide accurate and timely financial data and analysis to help inform the decision.

Question 5

Which statement is FALSE about information used for decision making?

Accepted Answer

The statement "Relevant information must be totally accurate or it is useless" is false. While accuracy is important for decision making, it is rarely possible to have information that is completely accurate. In many cases, decision makers must work with incomplete or uncertain information, but they can still make use of this information if they assess its reliability and potential impact on the decision.

Question 6

________ is the predicted future costs and revenues that will differ among alternative courses of action.

Accepted Answer

Relevant information refers to future costs and revenues that will differ among alternative courses of action. Sunk costs are past costs that cannot be changed and are not relevant for decision-making. Predictable information may or may not be relevant for decision-making depending on its impact on future costs and revenues. Target pricing is a pricing strategy that may be influenced by relevant information, but it is not the same as relevant information itself.

Question 7

The accountant's role in decision making involves providing the relevant information for decision makers.

Accepted Answer

The accountant's role in decision making is to provide accurate and relevant financial information to decision makers such as managers, investors, and stakeholders. This information is needed to understand the financial performance, risks, and opportunities of the organization and make informed decisions. Therefore, the statement is true.

Question 8

If perfectly accurate and relevant information is not available for decision making,the accountant should consider using information that is ________.

Accepted Answer

In decision making, it is more important to have relevant information, even if it is not perfectly accurate or precise. Imprecise but relevant information can still provide valuable insights and contribute to informed decision making. Precise but irrelevant information or imprecise and irrelevant information would not be useful for decision making. Timeliness is also important, but it should not come at the expense of accuracy or relevance.

Question 9

What are the qualitative aspects of a decision?

Accepted Answer

Qualitative aspects refer to factors that are difficult to measure in terms of dollars and cents. These may include factors such as customer satisfaction, employee morale, or environmental impact. These are important considerations in decision-making, even though they cannot be easily quantified. Options B through D are incorrect because they do not accurately describe qualitative aspects of a decision.

Question 10

Relevant information is the historical costs and revenues that differ due to alternative courses of action.

Accepted Answer

Relevant information refers to future costs and revenues that will differ among alternatives. Historical costs are sunk costs and do not change with future decisions.

Question 11

In the decision process,________ is the process of putting a decision into action.

Accepted Answer

Implementation is the process of taking a decision and putting it into action. This involves planning, organizing, and executing the decision in order to achieve the desired goal. Prediction refers to estimating the outcome of a decision, feedback is the information received about the outcome, and evaluation by performance is assessing the effectiveness of the decision after it has been implemented. These are all important steps in the decision process, but implementation is the step that involves taking action. Therefore, option C is the correct answer.

Question 12

Historical or past information can have an indirect bearing on a decision because ________.

Accepted Answer

Past information can provide insights and patterns that may help in predicting future outcomes. This can inform present decisions and potentially lead to better outcomes. However, it's important to note that past information should be used cautiously and not be relied on as the sole basis for making a decision.

Question 13

Cougar Company is trying to decide which product to manufacture.Expected direct materials costs are $4 for each product.In choosing between the two products,the direct materials costs are ________.

Accepted Answer

The direct materials costs are irrelevant because they do not differ between the two alternatives, making them non-influential in the decision-making process.

Question 14

In the decision process,predictions obtained from the accounting system and other sources become ________.

Accepted Answer

Predictions obtained from the accounting system and other sources become inputs to a decision model. These predictions help in evaluating different options and making an informed decision.

Question 15

________ is (are)defined as any method used for making a choice.

Accepted Answer

A decision model is a framework or method used for making a choice. It considers various factors, uncertainties, and trade-offs to identify the best possible option. Implementation model defines how a decision will be carried out, relevant costs include the costs that directly contribute to the decision's outcome, and the prediction model uses data and analytics to forecast future outcomes.

Question 16

A company is trying to decide which product to manufacture.The following information is available:  Which product cost is relevant to the decision?

Accepted Answer

The answer of A company is trying to decide which...

Question 17

Historical data may have a direct bearing on a decision made today.

Accepted Answer

The answer of Historical data may have a direct bearing...

Question 18

In decision making,relevance is more crucial than ________.

Accepted Answer

Precision is important in decision making, but relevance is even more crucial. Relevance refers to whether or not information is applicable and necessary for the specific decision being made. Therefore, it is more important to have relevant information than precise information that may not be applicable.

Question 19

In decision making situations,________ aspects may dominate quantitative aspects in many decisions.

Accepted Answer

Qualitative aspects refer to non-numerical or subjective factors such as emotions, values, culture, and beliefs. In many decisions, these aspects can have a significant impact and may even outweigh quantitative aspects. For example, when deciding on a career path, a person's passion and interest may be more important than salary or job security, which are quantitative factors.

Question 20

Information is relevant in business decisions if it is a(n)________.

Accepted Answer

Information is relevant in business decisions if it is both an expected future cost and it differs among alternatives. Relevant information assists a decision-maker in choosing between alternatives by providing information that impacts the future, such as future costs or benefits of an alternative, and differs among the choices available.

Quiz 5: Relevant Information for Decision Making With a Focus