MBA 620 Final Exam Actual Exam Newest 2025/2026 Complete Questions And Correct Detailed
Answers (Verified Answers) |Brand New 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 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 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
, MBA 620 Final Exam Actual Exam Newest 2025/2026 Complete Questions And Correct Detailed
Answers (Verified Answers) |Brand New Version!!
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
Is used for both product line and customer decisions to asses the profitability of various alternatives -
(ANSWER)contribution margin income statement
What two assumptions must be considered when evaluating special order scenarios? -
(ANSWER)capacity and pricing
Acquiring or maintaining fixed assets that will be used for more than a year such as buildings and
equipment - (ANSWER)capital expenditures
Deciding which long-term investments to make - (ANSWER)capital budgeting
Decisions involve using company funds to invest in long-term assets such as production facilities and
equipment; these decisions typically involve projects that affect cash flows of the company for many
years - (ANSWER)capital budgeting decisions
Describes the value of future cash flows (both in and out) in today's dollars - (ANSWER)present value
Answers (Verified Answers) |Brand New 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 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 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
, MBA 620 Final Exam Actual Exam Newest 2025/2026 Complete Questions And Correct Detailed
Answers (Verified Answers) |Brand New Version!!
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
Is used for both product line and customer decisions to asses the profitability of various alternatives -
(ANSWER)contribution margin income statement
What two assumptions must be considered when evaluating special order scenarios? -
(ANSWER)capacity and pricing
Acquiring or maintaining fixed assets that will be used for more than a year such as buildings and
equipment - (ANSWER)capital expenditures
Deciding which long-term investments to make - (ANSWER)capital budgeting
Decisions involve using company funds to invest in long-term assets such as production facilities and
equipment; these decisions typically involve projects that affect cash flows of the company for many
years - (ANSWER)capital budgeting decisions
Describes the value of future cash flows (both in and out) in today's dollars - (ANSWER)present value
