1|Page
2025/2026 MBA 620 FINAL EXAM/REVIEW WITH
ALL COMPLETE QUESTIONS AND DETAILED
ANSWERS (EXPERT VERIFIED) FOR GUARANTEED
PASS TOP-RATED A+.
MBA 620
Ace your MBA 620 Final Exam 2025/2026 with confidence. This
comprehensive exam resource features exam-style questions covering
essential topics such as strategy, finance, and management principles.
Perfect for graduate students preparing for their business
administration final.
Future costs that differ among competing decision
alternatives (a.k.a., differential or incremental costs) ......
ANSWER ....... relevant costs
Revenues that differ when one alternative is selected over
another. For example, if a company is deciding whether to
keep all customers (Alternative 1) or drop certain less
profitable customers (Alternative 2), difference between total
revenue for Alternative 1 and total revenue for Alternative 2.
...... ANSWER ....... differential revenues
Costs that differ when one alternative is selected over
another. For example, if a company is deciding whether to
make a product internally (Alternative 1) or outsource
production (Alternative 2), difference between costs for
,2|Page
Alternative 1 and Alternative 2 ...... ANSWER .......
differential costs
Reviewing the differential revenues and costs for alternative
courses of action; this is used by management to evaluate
different alternatives and to select the best course of action
...... ANSWER ....... differential analysis
Means a company is deciding whether to make a product
internally or buy the product from an outside firm.
Differential analysis helps managers focus solely on the costs
that are relevant to the make-or-buy decision. Variable
production costs are typically differential costs. Fixed
production costs must be reviewed on a case-by-case basis to
determine which costs are differential and which are not.
Managers typically select the alternative with the lowest cost.
...... ANSWER ....... make-or-buy decision
A cost that can be avoided, or eliminated, if one alternative is
chosen over another (also differential costs) ...... ANSWER
....... avoidable cost
How is differential analysis used in deciding whether to keep
or drop product lines?
,3|Page
A ____________ __________ _________ ___________ is
prepared, which includes information for each product line
and a total column for all product limes. Another
_____________ _____________ is prepared in the same
format, which excludes the product line the company would
like to drop. Decision makers select the alternative with the
highest ___________ ...... ANSWER ....... contribution
margin income statement, income statement, profit
Can be traced directly to a product line, and are typically
avoidable if the product line is eliminated ...... ANSWER
....... direct fixed costs
Cannot be traced directly to a product line, and are assigned
to product lines using an allocation process. These costs are
typically not differential costs since they are allocated to
remaining products if a product line is dropped ......
ANSWER ....... allocated fixed costs
Managers often use ________ as a determining factor for
deciding whether to keep or drop customers and products
...... ANSWER ....... profit
, 4|Page
For product line decisions, _______ and _______ are
assigned to individual product lines. For customer decisions,
both are assigned to individual customers. ...... ANSWER
....... revenues and costs
Is used for both product line and customer decisions to asses
the profitability of various alternatives ...... ANSWER
....... contribution margin income statement
What two assumptions must be considered when evaluating
special order scenarios? ...... ANSWER ....... capacity
and pricing
Acquiring or maintaining fixed assets that will be used for
more than a year such as buildings and equipment ......
ANSWER ....... capital expenditures
Deciding which long-term investments to make ......
ANSWER ....... capital budgeting
Decisions involve using company funds to invest in long-
term assets such as production facilities and equipment; these
decisions typically involve projects that affect cash flows of
the company for many years ...... ANSWER .......
capital budgeting decisions
2025/2026 MBA 620 FINAL EXAM/REVIEW WITH
ALL COMPLETE QUESTIONS AND DETAILED
ANSWERS (EXPERT VERIFIED) FOR GUARANTEED
PASS TOP-RATED A+.
MBA 620
Ace your MBA 620 Final Exam 2025/2026 with confidence. This
comprehensive exam resource features exam-style questions covering
essential topics such as strategy, finance, and management principles.
Perfect for graduate students preparing for their business
administration final.
Future costs that differ among competing decision
alternatives (a.k.a., differential or incremental costs) ......
ANSWER ....... relevant costs
Revenues that differ when one alternative is selected over
another. For example, if a company is deciding whether to
keep all customers (Alternative 1) or drop certain less
profitable customers (Alternative 2), difference between total
revenue for Alternative 1 and total revenue for Alternative 2.
...... ANSWER ....... differential revenues
Costs that differ when one alternative is selected over
another. For example, if a company is deciding whether to
make a product internally (Alternative 1) or outsource
production (Alternative 2), difference between costs for
,2|Page
Alternative 1 and Alternative 2 ...... ANSWER .......
differential costs
Reviewing the differential revenues and costs for alternative
courses of action; this is used by management to evaluate
different alternatives and to select the best course of action
...... ANSWER ....... differential analysis
Means a company is deciding whether to make a product
internally or buy the product from an outside firm.
Differential analysis helps managers focus solely on the costs
that are relevant to the make-or-buy decision. Variable
production costs are typically differential costs. Fixed
production costs must be reviewed on a case-by-case basis to
determine which costs are differential and which are not.
Managers typically select the alternative with the lowest cost.
...... ANSWER ....... make-or-buy decision
A cost that can be avoided, or eliminated, if one alternative is
chosen over another (also differential costs) ...... ANSWER
....... avoidable cost
How is differential analysis used in deciding whether to keep
or drop product lines?
,3|Page
A ____________ __________ _________ ___________ is
prepared, which includes information for each product line
and a total column for all product limes. Another
_____________ _____________ is prepared in the same
format, which excludes the product line the company would
like to drop. Decision makers select the alternative with the
highest ___________ ...... ANSWER ....... contribution
margin income statement, income statement, profit
Can be traced directly to a product line, and are typically
avoidable if the product line is eliminated ...... ANSWER
....... direct fixed costs
Cannot be traced directly to a product line, and are assigned
to product lines using an allocation process. These costs are
typically not differential costs since they are allocated to
remaining products if a product line is dropped ......
ANSWER ....... allocated fixed costs
Managers often use ________ as a determining factor for
deciding whether to keep or drop customers and products
...... ANSWER ....... profit
, 4|Page
For product line decisions, _______ and _______ are
assigned to individual product lines. For customer decisions,
both are assigned to individual customers. ...... ANSWER
....... revenues and costs
Is used for both product line and customer decisions to asses
the profitability of various alternatives ...... ANSWER
....... contribution margin income statement
What two assumptions must be considered when evaluating
special order scenarios? ...... ANSWER ....... capacity
and pricing
Acquiring or maintaining fixed assets that will be used for
more than a year such as buildings and equipment ......
ANSWER ....... capital expenditures
Deciding which long-term investments to make ......
ANSWER ....... capital budgeting
Decisions involve using company funds to invest in long-
term assets such as production facilities and equipment; these
decisions typically involve projects that affect cash flows of
the company for many years ...... ANSWER .......
capital budgeting decisions
