(BQ) Part 2 book "Managerial uses of accounting information" has contents: Consistent framing under uncertainty, consistent framing under uncertainty, the impressionism school, the modernism school, consistent decision framing, allocation among tasks,.and other contents. | 8 Consistent Decision Framing Our focus now turns to the topic of managerial behavior. Studying managerial uses of accounting information requires we combine accounting and managerial behavior. This, in turn, demands we adopt some image, implicit or explicit, of managerial behavior. Just as we traced costing art’s foundations to the economic theory of cost, we now trace decision making art’s foundation to economic rationality. We begin with a brief review of economic rationality and its central idea of consistent behavior. From there we examine the important topic of framing a decision. Framing refers to the description of a decision problem that we construct. It is a description or representation. It is also personal. We construct it. The framing exercise is also an application of managerial art. The gifted manager can balance detail and abstraction, the quantitative and the qualitative, inclusion and exclusion in describing or framing a decision problem. Framing is important for a variety of reasons, We will see, for example, that various frames or descriptions call for various measures of cost and benefit. For example, in the preceding chapters we were careful to introduce the firm’s problem as simultaneously selecting factors and products to maximize its profit, resulting in a problem statement that contained no measure of cost. We then decomposed the problem into first determining the firm’s cost function and second selecting its outputs to maximize revenue less cost, resulting in a problem statement that contained an explicit measure of cost. . Demski, Managerial Uses of Accounting Information, DOI: 8, c Springer Science+Business Media, LLC 2008 168 8. Consistent Decision Framing This little adventure, however, is only the beginning. There are countless ways to frame a decision, and each leads to a different measure of cost. What we mean by the cost of something is highly contextual. In fact, what we mean by the term cost in a .
