(BQ) Part 2 book "Managerial accounting for managers" has contents: Capital budgeting decisions, profit planning, flexible budgets and performance analysis, profit planning, performance measurement in decentralized organizations, standard costs and variances,.and other contents. | Confirming Pages Chapter Find more at 7 Differential Analysis: The Key to Decision Making Massaging the Numbers LEARNING OBJECTIVES After studying Chapter 7, you should be able to: Identify relevant and irrelevant costs and benefits in a decision. LO 7–2 Prepare an analysis showing whether a product line or other business segment should be added or dropped. LO 7–3 Prepare a make or buy analysis. LO 7–4 Prepare an analysis showing whether a special order should be accepted. LO 7–5 Determine the most profitable use of a constrained resource. LO 7–6 Determine the value of obtaining more of the constrained resource. LO 7–7 Prepare an analysis showing whether joint products should be sold at the split-off point or processed further. Building and expanding convention centers appears to be an obsession with politicians. Indeed, billions of dollars are being spent to build or expand convention centers in numerous cities across the United States. Given that trade show attendance across the country has been steadily declining, how do politicians justify these enormous investments? Politicians frequently rely on consultants who produce studies that purport to show a favorable economic impact on the area of a new convention center. These economic impact studies are bogus in two respects. First, a large portion of the so-called favorable economic impact would be realized by a city even if it did not invest in a new or expanded convention center. For example, Portland, Oregon, voters overwhelmingly opposed spending $82 million to expand their city’s convention center. Nonetheless, local politicians proceeded with the project. After completing the expansion, more than 70% of the people spending money at trade shows in Portland were from the Portland area. How much of the money spent by these locals would have been spent in Portland anyway if the convention center had not been expanded? We don’t know, but in all likelihood much of this money
