1. Terminology and Concepts

Relevant cost

Incremental cost Irrelevant cost

Avoidable cost Differential cost

Sunk costs

Differential revenue

Opportunity cost

Joint product

2. Adding or Dropping a Segment Decision rule:

Calculate advantage or (disadvantage) of adding or dropping a segment 3. Make or Buy Decisions

Decision rule:

4. Special Order Decision Decision rule: Calculate the advantage or (disadvantage) of accepting a special order.

5. Sell As Is or Process Further Decision Decision rule: