ACCT 2101 Exam 3 with precise detailed answers || || || || || || ||
incremental analysis - ✔✔the process used to identify the financial data that change under || || || || || || || || || || || || || ||
alternative courses of action || || ||
data for incremental analysis involves estimates and uncertainty - ✔✔in incremental analysis,
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both costs and revenues may change
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Relevant Costs and Revenues - ✔✔those costs and revenues that differ across alternatives
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opportunity cost - ✔✔a lost benefit as a result of choosing one course of action over another
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-always relevant ||
sunk cost - ✔✔costs that have already been incurred and cannot be changed or avoided by any
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present or future decisions || || ||
-never relevant ||
many companies have shifted to activity based costing because... - ✔✔-results in more accurate
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OH allocation
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-is compatible w incremental analysis
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-results in improved incremental analysis || || || ||
simple interest - ✔✔(computed on principal amount only)
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the return on the principle for one period
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=principle x i rate x time || || || || ||
compound interest - ✔✔(computed on principal and any interest earned that has not been paid or
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withdrawn)
incremental analysis - ✔✔the process used to identify the financial data that change under || || || || || || || || || || || || || ||
alternative courses of action || || ||
data for incremental analysis involves estimates and uncertainty - ✔✔in incremental analysis,
|| || || || || || || || || || || ||
both costs and revenues may change
|| || || || ||
Relevant Costs and Revenues - ✔✔those costs and revenues that differ across alternatives
|| || || || || || || || || || || ||
opportunity cost - ✔✔a lost benefit as a result of choosing one course of action over another
|| || || || || || || || || || || || || || || || ||
-always relevant ||
sunk cost - ✔✔costs that have already been incurred and cannot be changed or avoided by any
|| || || || || || || || || || || || || || || || ||
present or future decisions || || ||
-never relevant ||
many companies have shifted to activity based costing because... - ✔✔-results in more accurate
|| || || || || || || || || || || || || ||
OH allocation
||
-is compatible w incremental analysis
|| || || || ||
-results in improved incremental analysis || || || ||
simple interest - ✔✔(computed on principal amount only)
|| || || || || || ||
the return on the principle for one period
|| || || || || || ||
=principle x i rate x time || || || || ||
compound interest - ✔✔(computed on principal and any interest earned that has not been paid or
|| || || || || || || || || || || || || || || ||
withdrawn)
