Question 1. Why is cost allocation imprecise?? Pick one of the different methods we can use, describe it and the pluses and minuses of that method?
Question 2. The master budget contains three types of budgets. What do you think is the cornerstone (or most critical element) of the master budget? Discuss why?
Question 3. Fundamental to the decision-making process is the ability to determine whether a cost is relevant to the decision. Tactical decision making consists of choosing among alternatives with an immediate or limited end in view. It should be noted, however, that short-term decisions can lead to long-term consequences. Tactical decision making consists of choosing among alternatives with an immediate or limited end in view. Tactical decisions can be short term or small scale in nature but must be made so that larger strategic objectives are served. Identify the primary qualities of revenues and costs that are relevant for decision making.
Question 4. There are four primary methods of examining capital decisions - two are discounting methods and two are not. Please pick one of them, explain the method and the pros and cons. Remember; include a discussion on the difference between discounting and non-discounting methods.