Accounting 2037 - Exam 3 Wright Questions and Answers .

Accounting 2037 - Exam 3 Wright
Questions and Answers 2025-2026.
Incremental costs - Answer costs that are different under alternative choices. costs that are
the same under either motion are not incremental and are not relevant



Relevant benefits - Answer incremental reward from choosing one option over the other



Profit - Answer Rev - FC - VC = profit

(Fc-VC)= expenses



What costs matter when making decisions about Product Mix with Constrained Sources -
Answer - SP

- DM

- DL

- CM

- demand

- profit



What costs matter when making decisions about keeping or replacing equipment - Answer -
market value of old equipment

- cost of buying new equipment

- different operating cost

- efficiency



What costs DO NOT matter when making decisions about keeping or replacing equipment -
Answer - sunk costs (like cost of current machine)

- accumulated dep



CapEx methods that ignore TVM - Answer (shorter term decisions)

- payback period: used to explain quickly when we ill get money

- accounting rate of return: used less often