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MBA 620 Final Exam Actual Exam Newest 2025/2026
Complete Questions And Correct Detailed Answers
(Verified Answers) |Newest Exam Version!!
Future costs that differ among competing decision
alternatives (a.k.a., differential or incremental costs) -
Answer-relevant costs
Revenues that differ when one alternative is selected over
another. For example, if a company is deciding whether to
keep all customers (Alternative 1) or drop certain less
profitable customers (Alternative 2), difference between
total revenue for Alternative 1 and total revenue for
Alternative 2. - Answer-differential revenues
Costs that differ when one alternative is selected over
another. For example, if a company is deciding whether to
make a product internally (Alternative 1) or outsource
production (Alternative 2), difference between costs for
Alternative 1 and Alternative 2 - Answer-differential costs
Reviewing the differential revenues and costs for
alternative courses of action; this is used by management
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to evaluate different alternatives and to select the best
course of action - Answer-differential analysis
Means a company is deciding whether to make a product
internally or buy the product from an outside firm.
Differential analysis helps managers focus solely on the
costs that are relevant to the make-or-buy decision.
Variable production costs are typically differential costs.
Fixed production costs must be reviewed on a case-by-
case basis to determine which costs are differential and
which are not. Managers typically select the alternative
with the lowest cost. - Answer-make-or-buy decision
A cost that can be avoided, or eliminated, if one alternative
is chosen over another (also differential costs) - Answer-
avoidable cost
How is differential analysis used in deciding whether to
keep or drop product lines?
A ____________ __________ _________ ___________
is prepared, which includes information for each product
line and a total column for all product limes. Another
_____________ _____________ is prepared in the same
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format, which excludes the product line the company
would like to drop. Decision makers select the alternative
with the highest ___________ - Answer-contribution
margin income statement, income statement, profit
Can be traced directly to a product line, and are typically
avoidable if the product line is eliminated - Answer-direct
fixed costs
Cannot be traced directly to a product line, and are
assigned to product lines using an allocation process.
These costs are typically not differential costs since they
are allocated to remaining products if a product line is
dropped - Answer-allocated fixed costs
Managers often use ________ as a determining factor for
deciding whether to keep or drop customers and products
- Answer-profit
For product line decisions, _______ and _______ are
assigned to individual product lines. For customer
decisions, both are assigned to individual customers. -
Answer-revenues and costs
MBA 620 Final Exam Actual Exam Newest 2025/2026
Complete Questions And Correct Detailed Answers
(Verified Answers) |Newest Exam Version!!
Future costs that differ among competing decision
alternatives (a.k.a., differential or incremental costs) -
Answer-relevant costs
Revenues that differ when one alternative is selected over
another. For example, if a company is deciding whether to
keep all customers (Alternative 1) or drop certain less
profitable customers (Alternative 2), difference between
total revenue for Alternative 1 and total revenue for
Alternative 2. - Answer-differential revenues
Costs that differ when one alternative is selected over
another. For example, if a company is deciding whether to
make a product internally (Alternative 1) or outsource
production (Alternative 2), difference between costs for
Alternative 1 and Alternative 2 - Answer-differential costs
Reviewing the differential revenues and costs for
alternative courses of action; this is used by management
,2|Page
to evaluate different alternatives and to select the best
course of action - Answer-differential analysis
Means a company is deciding whether to make a product
internally or buy the product from an outside firm.
Differential analysis helps managers focus solely on the
costs that are relevant to the make-or-buy decision.
Variable production costs are typically differential costs.
Fixed production costs must be reviewed on a case-by-
case basis to determine which costs are differential and
which are not. Managers typically select the alternative
with the lowest cost. - Answer-make-or-buy decision
A cost that can be avoided, or eliminated, if one alternative
is chosen over another (also differential costs) - Answer-
avoidable cost
How is differential analysis used in deciding whether to
keep or drop product lines?
A ____________ __________ _________ ___________
is prepared, which includes information for each product
line and a total column for all product limes. Another
_____________ _____________ is prepared in the same
, 3|Page
format, which excludes the product line the company
would like to drop. Decision makers select the alternative
with the highest ___________ - Answer-contribution
margin income statement, income statement, profit
Can be traced directly to a product line, and are typically
avoidable if the product line is eliminated - Answer-direct
fixed costs
Cannot be traced directly to a product line, and are
assigned to product lines using an allocation process.
These costs are typically not differential costs since they
are allocated to remaining products if a product line is
dropped - Answer-allocated fixed costs
Managers often use ________ as a determining factor for
deciding whether to keep or drop customers and products
- Answer-profit
For product line decisions, _______ and _______ are
assigned to individual product lines. For customer
decisions, both are assigned to individual customers. -
Answer-revenues and costs
