1. What are differential revenues and costs?

2. What is differential analysis?

3. Define what is meant by a "make-or-buy" decision. Describe how differential analysis can be used to assist in making this type of decision.

4. and provide two different formats for presenting the same analysis. Describe the similarities and differences in these two formats.

5. What is an avoidable cost?

6. Review Why did Salt Lake City choose to outsource the concrete panels to a company in Mexico City even though the library was being constructed in Salt Lake City?

7. How is differential analysis used in deciding whether to keep or drop product lines?

8. Why are direct fixed costs typically differential costs?

9. Why are allocated fixed costs typically not differential costs?

10. What is an opportunity cost? Why is an opportunity cost a differential cost?

11. Review What did Kmart do with 24 of its stores? Why might Kmart have taken this action?

12. How is differential analysis similar for customer decisions and product line decisions?

13. Review Why did ABCO Automation, Inc., fire its biggest client even though the client provided close to 60 percent of ABCO's annual revenue?

14. What two important assumptions must be considered when evaluating special order scenarios?

15. What is cost-plus pricing?

16. Describe the four steps of target costing.

17. Describe the five steps used to manage constraints according to the theory of constraints.

18. What is a qualitative advantage of keeping unprofitable customers?

19. What are joint products and joint costs?

20. Describe the two methods of allocating joint costs