Triad Children\'s Center, a non-profit organization, uses relevant cost analysis

Question

Triad Children's Center, a non-profit organization, uses relevant cost analysis to determine whether or not new services are desirable. TCC is looking at adding a new educational program for grade school children who are having difficulty with their reading and math skills. The following relevant costs are expected if the program is accepted:

Costs (per year)

Program Director $39,000

Part-time Assistants $28,000

Variable cost per child $900

TCC estimates that a maximum of 40 children will participate in this program in the first year. If TCC decides to implement this program, funding will be received from the City Chamber of Commerce ($50,000) and a local Private University Endowment Fund ($35,000).

In deciding between alternative choices for a given situation, managers usually employ a five-step process. Which of the following is not a recommended step in this decision-making process?

Evaluate performance.

Specify the criteria and identify the alternative actions.

Select and implement the best course of action.

Perform relevant and strategic cost analysis.

Review the completed financial audit report.

Explanation / Answer

While specifying criteria and identify alternative actions , perform relevant and strategic cost analysis , select and implement best course of action and evaluate performance are steps in decision making process, Review the completed financial Audit report is not part of the decision making process in alternative choice situation.

So Answer is the option : Review the completed financial audit report. is not a recommended step in this decision-making process.

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