Identify and Explain the Criteria for Retaining and Dropping Items

question 45

Essay

Identify and explain the criteria for retaining and dropping items to revise a test. Make a matrix with faked data for 5 items. Explain why each item should or should not be retained.

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Definitions:

Differential Revenue

The difference in revenue between two alternative decisions or periods.

Course of Action

A decision plan or set of steps to be followed to solve a problem or achieve an objective.

Contribution Margin

The amount remaining from sales revenue after variable costs are deducted, used to cover fixed costs and generate profit.

Differential Revenue

Differential revenue is the difference in revenue between two alternative decisions or periods, highlighting the potential increase or decrease in income resulting from a chosen action.