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CHAPTER 6 Incremental Analysis ASSIGNMENT CLASSIFICATION TABLE Brief A B Study Objectives Questions Exercises Exercises Problems Problems 1 . Identify the steps in 1, 2 1 managements decision- making process. 2 . Describe the concept 3, 4 2 of incremental analysis. 3 . Identify the relevant 5 3 1, 2, 13 1A 1B costs in accepting an order at a special price. 4 . Identify the relevant 6, 7 4 3, 4, 13 2A 2B costs in a make-or-buy decision. 5 . Identify the relevant costs 8, 9, 10 5, 6 5, 6, 7, 13 3A 3B in determining whether to sell or process materials further. 6 . Identify the relevant costs 11 7 8, 9, 13 4A 4B to be considered in retaining or replacing equipment. 7 . Identify the relevant costs 12 8 10, 13 5A 5B in deciding whether to eliminate an unprofitable segment. 8 . Determine sales mix 13, 14 9 11, 12 when a company has limited resources. ASSIGNMENT CHARACTERISTICS TABLE Problem Difficulty Time Number Description Level Allotted (min.) 1A Make incremental analysis for special order and identify Simple 20 30 nonfinancial factors in the decision. 2A Make incremental analysis related to make or buy, Moderate 30 40 consider opportunity cost, and identify nonfinancial factors. 3A Determine if product should be sold or processed further. Moderate 30 40 4A Compute gain or loss, and determine if equipment should Moderate 30 40 be replaced. 5A Compute contribution margin and prepare incremental Moderate 30 40 analysis concerning elimination of divisions. 1B Make incremental analysis for special order and identify Simple 20 30 nonfinancial factors in the decision. 2B Make incremental analysis related to make or buy, Moderate 30 40 consider opportunity cost, and identify nonfinancial factors. 3B Determine if product should be sold or processed further. Moderate 30 40 4B Compute gain or loss, and determine if equipment should Moderate 30 40 be replaced. 5B Compute contribution margin and prepare incremental Moderate 20 30 analysis concerning elimination of divisions. BLOOM'S TAXONOMY TABLE Correlation Chart between Blooms Taxonomy, Study Objectives and End-of-Chapter Exercises and Problems Study Objective Knowled ge Comprehension Application Analysis Synthesi s 1. Identify the steps in manage-ments decision-making process. BE6-1 Q6-1Q6-2 2. Describe the concept of incremental analysis. Q6-3Q6-4 BE6-2 3. Identify the relevant costs inaccepting an order at a specialprice. Q6-5 BE6-3 E6-1E 1AP6 4. Identify the relevant costs in amake- or-buy decision. Q6-6Q6-7 BE6-4 E6-3E 2AP6 5. Identify the relevant costs indetermining whether to sell orprocess materials further. Q6-8Q6- 9Q6-10 BE6-5BE6-6 E6-5E 13P6 6. Identify the relevant costs to beconsidered in retaining or replacing equipment. ... View Full Document

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