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CHAPTER 21 INCREMENTAL ANALYSIS
OVERVIEW OF BRIEF EXERCISES, EXERCISES, PROBLEMS, AND CRITICAL THINKING CASES
Brief Exercises B. Ex. 21.1 B. Ex. 21.2 B. Ex. 21.3 B. Ex. 21.4 B. Ex. 21.5 B. Ex. 21.6 B. Ex. 21.7 B. Ex. 21.8 B. Ex. 21.9 B. Ex. 21.10 Learning Objectives 1, 3 2–4 1, 2, 4 2, 4, 5 2 2 4 1, 3, 4 2–4 2–4

Topic Using average unit costs Make or buy Joint cost allocation Outsource a product Opportunity costs Identifying costs Allocating productive capacity Match decision and relevant costs/revenues Sell at split-off or process further Scrap or rebuild

Skills Analysis Analysis, judgment Analysis, judgment Analysis, judgment Analysis Analysis, judgment Analysis Analysis Analysis Analysis

Exercises 21.1 21.2 21.3 21.4 21.5
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Scarce resources

Learning Objectives Skills 1–3, 5 Analysis, communication, judgment 1–4 Analysis 1–4 Analysis 1–4 Analysis, communication 1–5 1–5 1–4 1–3, 5 1–5 Analysis, communication Analysis, communication, judgment Analysis Analysis, communication, judgment Analysis, communication, judgment

Critical Thinking Cases 21.1 Factors that limit capacity 21.2 Relevant information and opportunity costs

4 1–3, 5

Analysis, communication, judgment Analysis, communication, judgment Analysis, communication, judgment, research, technology Analysis, communication, judgment

21.3

Real World: Dow Chemical Co. (Internet) SEC enforcement fines (Ethics, fraud and corporate governance)

3–5

21. 4

1–3

© The McGraw-Hill Companies, Inc., 2012 CH21-Overview (p.2)

DESCRIPTIONS OF PROBLEMS AND CRITICAL THINKING CASES
Below are brief descriptions of each problem, case, and the first Internet assignment. These descriptions are accompanied by the estimated time (in minutes) required for completion and by a difficulty rating. The time estimates assume use of the partially filled-in working papers. Problems 21.1 A,B D. Lawrance/Swirl Incorporated Use of incremental analysis to determine whether it would be advantageous to accept a large special order at a sales price below average unit cost. Student is also asked to identify other considerations in this type of decision. 21.2 A,B Easy Use Tool Co./Matchless Corp. Use incremental analysis in a make or buy

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