Evaluation of how income will change based on an alternative course of action

A) Opportunity cost
B) Sunk cost
C) Theory of constraints
D) Differential analysis
E) Product cost distortion

Differential analysis is the evaluation of how income will change based on an alternative course of action. The other terms are defined as follows: A) Opportunity cost is the cost of the forgone next best alternative. B) Sunk cost is a cost that has already been incurred and cannot be recovered. C) Theory of constraints is a management philosophy that aims to identify and alleviate constraints that limit a company's ability to achieve its goals. E) Product cost distortion is the result of allocating fixed manufacturing overhead costs unevenly to products.