1. What is the difference between tactical and strategic decisions?
2. Explain why depreciation on an existing asset is always irrelevant.
3. Give an example of a future cost that is not relevant.
4. Explain why relevant costs need to be expressed on a periodically recurring basis.
5. Relevant costs always determine which alternative should be chosen. Do you agree or disagree? Explain.
6. Give an example of a fixed cost that is relevant.
7. What is the difference, if any, between a relevant cost and a differential cost?
8. When, if ever, is depreciation a relevant cost?
9. What role do past costs play in relevant costing decisions?
10. Can direct materials ever be irrelevant in a make- or-buy decision? Explain.
11. Discuss the importance of complementary effects in a keep-or-drop decision.
12. What are some ways a manager can expand his or her knowledge of the feasible set of alternatives?
13. Should joint costs be considered in a sell-or-process-further decision? Explain.