1. One Very Short Paragraph of discussion needed:
A. Computation of Net Income
B. What useful information do we derive from the computation of Net Income?
C. Do not simply answer with the formula for calculating Net Income - Revenue less Expenses. Rather, comment on the value added economic information we receive through the computation of Net Income. For example, is it a measure of increase in shareholders' wealth or is it a measure of the increase in cash available to the company, etc.?
D. What other portions of a company's financial statements are important - and why?
2. One Very Short Paragraph of discussion needed:
A. Responsibility accounting
B. In your job (or in your personal life), what types of costs can you control, and what types of costs are beyond your control? What are the repercussions if you overspend those costs that you can control?
3. One Very Short Paragraph of discussion needed:
A. Inclusion of fixed costs
B. Why might the inclusion of fixed costs in the calculation the cost of a product provide us with a number that is not very useful? For what purposes is such a calculation possibly useful?
4. One Very Short Paragraph of discussion needed:
A. Sunk costs
B. Are sunk costs ever relevant for decision-making purposes? if so, then in what way? If not, then why do people often act as if they are relevant?