Chapter 7, Problem 1E

Identifying Steps in Decision-Making Process
Listed below are a number of statements concerning management’s decision-making process. Identify whether each statement is correct or incorrect. For all incorrect statements, indicate how to correct the statement.
1. The final step in management’s decision-making process is to actually make the decision.
2. In making business decisions, management w ordinary only consider financial information because s objectively determined.
3. The first step in management’s decision-making process is to determine the decision alternatives.
4. Relevant costing is used for short-term decision making because focuses only on the costs and benefits that are relevant to the decision at hand.
5. Under incremental analysis, variable costs w change under different courses of action, but fled costs fl never change.
6. Decisions involve a choice among alternative courses of action.
7. When using differential analysis, some costs will change under alternative courses of action, but revenues will not change.