Topic outline
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Presentation length: 6 minutes 39 seconds
In this presentation, we introduce you to a basic decision making model. Decision making is the process of choosing from among alternative courses of action in order to achieve an objective. It is important to understand the inputs and limitations involved, and how accounting information plays a valuable part.
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Learning Task 1.1 - The Decision Making Model
Your friend Allan knows that you are studying accounting at university and comes to you for advice.
Allan owns an ice cream van, which he takes to various community and sporting events at weekends. He is trying to make as much money as he can from this weekend work as he is saving to take a year off and travel the world.
Unfortunately, the ice cream making machine in Allan’s van has broken down and is not repairable. He knows from the past sales data that he has maintained that he sells on average 950 ice creams per month. There are three different types of new ice cream making machines for Allan to consider purchasing. He has gathered the following information regarding each machine
Machine Type
Machine Cost ($)
Income/Ice Cream ($)
Cost/Ice Cream ($)
Super Soft
7,000
3.00
1.50
Family Special
5,000
2.50
0.80
Budget Ice
4,000
2.00
0.60
Allan has already saved $10,000 and has the money invested in an online cash management account, which pays him 12% interest per annum. He will leave any of the money he does not spend on the new machine in this account.
Using the decision making model you have been introduced to advise Allan which machine (he only wants to purchase one machine) will help him achieve his goal.
Your analysis should be conducted over a period of one month. Ignore taxation in your advice.
Suggested Procedure
- Read through the scenario above.
- Determine what information you need in order to provide advice.
- Perform an analysis based on the information provided.
- Decide on a recommendation. In your recommendation, consider what questions you might take to Allan that would better inform the decision. What other factors does Allan need to take into account?
- Compare your advice to that in the solution. If you have questions, post your questions to Week 1 Q&A forum.
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Learning Task 1.2 - Case Study 1
This is the first case study and there is one more at the end of the week. You will be presented with a case study at the end of each topic as you progress through the course. It is important to remember that each case study builds upon the last, hence you will need to devise a system that assists you in the tracking of important information as you move from topic to topic.
In answering some of the questions, you may need to refer to the Graduate Qualities at UniSA.
Suggested Procedure
- Access the Case Study.
- Complete the tasks described in the case study.
- Check your responses against the worked solutions.
- If you have any questions about the task, post your questions in the Week 1 Q&A forum.
- Store your work for future reference.
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