LearnSmarts Chapter 7

Comparing the costs and benefits of decision alternatives is done using ___ analysis because it focuses on the factors that will change between the decision alternatives.

incremental

Which of the following should a company consider when making a decision?

Relevant costs and benefits

Which of the following is considered irrelevant when planning a trip?

The original cost of the car

When making a decision to either go to a movie or rent a DVD, the cost of the movie ticket is an example of a(n) ___ cost.

avoidable; incremental

One of the benefits of dropping a product line is that a company can eliminate the product line's ___ fixed costs.

direct

The process of making a decision:

is basically the same for all decisions

If a company has a resource that could be used for something else, the ___ cost is the profit that could be derived from the best alternative use of the resource.

opportunity

Deciding what to do with a product that is ready to sell or could be enhanced is a:

sell or process further decision

When performing a keep-or-drop decision analysis, ___ fixed costs should be excluded from the analysis.

common

Discontinuing a ___ product can have a negative effect on related products.

complementary