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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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Model for Making Tactical Decisions

Austin Porter is a sophomore at a small Midwestern university (SMWU). He is considering whether to continue at this university or to transfer to one with a nationally recognized engineering program. Austin’s decision-making process included the following:

  1. a. He surfed the web to check out the sites of a number of colleges and universities with engineering programs.
  2. b. Austin wrote to five of the universities to obtain information on their engineering colleges, tuition and room and board costs, the likelihood of being accepted, and so on.
  3. c. Austin compared costs of the five other schools with the cost of his present school. He totaled the balance in his checking and savings accounts, estimated the earnings from his work-study job, and asked his parents whether or not they would be able to help him out.
  4. d. Austin’s high-school sweetheart had a long heart-to-heart talk with him about their future—specifically, that there might be no future if he left town.
  5. e. Austin thought that while he enjoyed his present college, its engineering program did not have the national reputation that would enable him to get a good job on either the East or West Coast. Working for a large company on the coast was an important dream of his.
  6. f. Austin’s major advisor agreed that a school with a national reputation would make job hunting easier. However, he reminded Austin that small college graduates had occasionally gotten the kind of jobs that Austin wanted.
  7. g. Austin had a number of good friends at SMWU, and they were encouraging him to stay.
  8. h. A friend of Austin’s from high school returned home for a long weekend. She attends a prestigious university and told Austin of the fun and opportunities available at her school. She encouraged Austin to check out the possibilities elsewhere.
  9. i. A friendly professor outside of Austin’s major area ran into him at the student union. She listened to his thinking and reminded him that a degree from SMWU would easily get him into a good graduate program. Perhaps he should consider postponing the job hunt until he had his master’s degree in hand.
  10. j. Two of the three prestigious universities accepted Austin and offered financial aid. The third one rejected his application.
  11. k. Austin made his decision.

Required:

Classify the Events a through k under one of the six steps of the model for making tactical decisions described in your text.

To determine

Classify each event under one of the six steps of decision-making model.

Explanation

Decision-Making Model:

A decision-making model can be defined as a set of procedures and steps that can be used to make a decision. This model can also be used to systematize the information and structure the thinking of the decision maker.

a. Person A searched on the internet regarding the number of universities and colleges that provide engineering programs. This event represents the second step of decision-making model that is identifying the alternatives.

b. Person A obtains the knowledge of five universities regarding their colleges of engineering, room and board cost, and tuition fees. This event represents the second step of decision-making model that is identifying the alternatives.

c. Person A compares the cost of his present school and the other five schools. Person A calculates the total of savings and checking accounts, estimates the earnings, and asked parents whether they will be able to help. This event represents the third step of decision-making model that is identifying the costs and benefits associated with each feasible alternative.

d. Person A and his girlfriend had a discussion regarding their future. This event represents the fifth step of decision-making model that is assessing the qualitative factors.

e. Person A thought that the college in which he is studying does not have any national recognition which may help the students to get a good job. Person A has a dream to work for a large company. This event represents the third step of decision-making model that is identifying the costs and benefits associated with each feasible alternative...

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