Question

In addition to the above (sunk costs, opportunity costs, incremental costs) many times there are qualitative factors that come into the decision making process. What nonquantitative aspects may also be relevant to the decision?

Answer 1

The non-quantitative factors that may also be relevant for decision making in cost accounting is as follows-

(i) Employee morale- The most important and sensitive resource of an organisation is the human resource. The employees contribution to an organisation is the pillar for its success. So, if they are not positively motivated, it might result in lay off or under performance. Hence, it becomes relevant for decision making.

(ii) Cheap product pricing- Sometimes, the cheap product prices may create an impression in the minds of customer with regard to poor quality. Hence, the product pricing shall maintain the market level prices and also be competitive in order to retain customers.

(iii) Customer support- The customer may always be willing for after sales services, so as to be more confident with regard to the products that he has purchased So, proper customer services are relevant for decision making.