Management Accounting

11

Decision Making

LEARNING OBJECTIVES

On completion of the study of the chapter, you should be able to understand:

• What is Decision Making?
• Steps in Decision Making.
• Different cost concepts in Decision Making.
• Concept of Relevant Cost and Relevant Revenue in Decision Making.
• Concept of Differential Cost.
• Comparison of Differential Cost analysis and Marginal Costing.
• Concept of key or limiting factor in Decision Making.
• Mostly occurred situations of Decision Making.

11.1 CONCEPT OF DECISION MAKING

Decision making is one of the most important functions of the management. Success of business planning highly depends on the Decision Making capacity of the management. Decision Making means the process of choosing the best one among the various ...