Cost managment∶accounting and control 第十八章解答手册.doc

CHAPTER 18 ACTIVITY RESOURCE USAGE MODEL AND TACTICAL DECISION MAKING QUESTIONS FOR WRITING AND DISCUSSION 1. Tactical decision making is choosing among alternatives with an immediate or limited end in mind. 2. Tactical decisions should support the overall strategic objectives of an organization. Often, the strategic objectives are served by small-scale actions. For example, making a part instead of buying it may lower costs of production and thus serve the strategic cost leadership objective. Or it may serve the objective of differentiation by helping to produce a higher-quality final product than produced by competitors. 3. Tactical cost analysis is the use of relevant cost data to identify the alternative that provides the greatest benefit to the organization. Steps 3–5 are the major components of tactical cost analysis: predicting costs, comparing relevant costs, and selecting the lowest cost alternative (or alternative with the greatest benefit). 4. Answers will vary. I (second author) have used this as a writing assignment for several years. It has been very successful; students enjoy analyzing their own decisions, whether it is buying a car, moving from the dorm into an apartment, or buying a puppy. Sometimes, the application of the model leads to new insights into their problems. 5. Relevant costs and revenues are future costs and revenues that differ across alternatives. Depreciation on an existing asset represents an allocation of a past cost. Past costs are sunk costs and therefore seldom relevant. 6. A future cost that is not relevant is a future cost that does not differ across the alternatives being considered. For example, rent on a factory in a keep-or-drop decision is a future cost, but it will be there whether one of the factory’s products is dropped or kept. 7. Disagree. Relevant costs are just part of the overall tactical decision model. Strategic effects and other qualitative factors may affect the decision. The effect may be such that a high