1. What are differential revenues and costs? 2. What is differential analysis? 3. Define what is...

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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. What is an avoidable cost? 5. How is differential analysis used in deciding whether to keep or drop product lines? 6. Why are direct fixed costs typically differential costs? 7. Why are allocated fixed costs typically not differential costs? 8. What is an opportunity cost? Why is an opportunity cost a differential cost? 9. How is differential analysis similar for customer decisions and product line decisions? 10. What two important assumptions must be considered when evaluating special order scenarios? 11. What is cost-plus pricing? 12. Describe the four steps of target costing. 13. Describe the five steps used to manage constraints according to the theory of constraints. 14. What is a qualitative advantage of keeping unprofitable customers? 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. What is an avoidable cost? 5. How is differential analysis used in deciding whether to keep or drop product lines? 6. Why are direct fixed costs typically differential costs? 7. Why are allocated fixed costs typically not differential costs? 8. What is an opportunity cost? Why is an opportunity cost a differential cost? 9. How is differential analysis similar for customer decisions and product line decisions? 10. What two important assumptions must be considered when evaluating special order scenarios? 11. What is cost-plus pricing? 12. Describe the four steps of target costing. 13. Describe the five steps used to manage constraints according to the theory of constraints. 14. What is a qualitative advantage of keeping unprofitable customers?

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Answer 1 Differential revenues and costs are the changes in revenues and costs between alternative courses of action They represent the difference in revenues or costs between two different scenarios ... View the full answer