ONLINE DISCUSSION 2 (STDM- ACCEPT OR REJECT A SPECIAL ORDER)

i- discuss (ilearn)

Question 1
Relevant information refers to information that must be taken into consideration for
decision making, whereas irrelevant information should be ignored. Explain briefly
three (3) characteristics of relevant information in decision making.

Three characteristics of relevant information in decision making are the first one is
impact on the future which means relevant information focused on future because
every decision deals with selecting course of action for the future. Nothing can be done
to alter the past. Since the relevant information involves future event, the managerial
accountant must be predict the amount of relevant cost and benefits.
Secondly, different under different alternatives, relevant information includes cost that
differ among alternatives. Expected future revenue and cost does not differ or remain
the same across the alternatives which is irrelevant and should be eliminate from
relevant information.

Thirdly, relevant information use for making decision of what the company would get if
they incurred some cost to running the production so the company will not over budget
on the production and it also give a hint about the company future profit

(6 marks)

Question 2
Suggest any three (3) qualitative factors to be considered by a company in deciding
whether to accept or reject a special order.
There are three qualitative factors to be considered by a company in deciding to accept
or reject a special order are to build business networking with other company. Next, to
secure future or other orders which means company need consider the special order
because it will affect their profit. The last one, to be a social responsibility even the
company will not get any profit from giving lower price for that special order.

(4 marks)
Total (10 marks)