Why Are Decision Trees Useful to Managers Who Plan Business

question 65

Multiple Choice

Why are decision trees useful to managers who plan business strategies?

• A)Decision trees explain the level of concentration in an industry.
• B)Decision trees can be used to increase the amount of product differentiation; this enables managers to charge higher prices for their products.
• C)Decision trees provide a systematic way of thinking through the implications of a strategy.
• D)Using a decision tree always leads to a dominant strategy.

Understand the distinction between direct and indirect costs, including examples of each.

Recognize the categorization of costs as period or product costs and their implications on financial statements.

Understand the purpose and functionality of a job order costing system in various organizational settings.

Distinguish between job order costing and process costing systems and their appropriate application contexts.

---

Definitions:

Real Wages

Wages adjusted for inflation, representing the actual buying power of compensation for work performed.

Economic Rent

The income earned from the use of resources above what is necessary to keep those resources in their current use.

Real Wages

Salaries recalibrated based on inflation rates to indicate the real value of earnings in terms of buying capacity.

Real Wages

Salaries recalibrated to account for inflation, indicating the actual buying capability of earnings.