SCM (FINALS) 2026 Exam Questions and
Answers | A+ Score Assured
Managers - 🧠ANSWER ✔✔must constantly make decisions. In making
these decisions, they must estimate how each decision could affect
operating income.
often select the course of action that maximizes expected operating income
over the period affected by the decision
Relevant information - 🧠ANSWER ✔✔is the expected future data that differ
among alternative courses of action.
, relevant cost - 🧠ANSWER ✔✔cost that is applicable to a particular decision
in the sense that it will have a bearing on which alternative the manager
selects.
Decision-making - 🧠ANSWER ✔✔is the process of studying and evaluating
two or more available alternatives leading to a final choice.
Avoidable cost - 🧠ANSWER ✔✔can be defined as a cost that can be
eliminated (in whole or in part) as a result of choosing one alternative over
another in a decision-making situation.
All costs are considered avoidable, except: - 🧠ANSWER ✔✔Sunk costs
Future costs
Relevant costs - 🧠ANSWER ✔✔are expected future costs which differ
between the decision alternatives
Sunk or historical costs - 🧠ANSWER ✔✔are never relevant in decisions
because they are not avoidable and therefore, they must be eliminated
from the manager's decision framework.
Answers | A+ Score Assured
Managers - 🧠ANSWER ✔✔must constantly make decisions. In making
these decisions, they must estimate how each decision could affect
operating income.
often select the course of action that maximizes expected operating income
over the period affected by the decision
Relevant information - 🧠ANSWER ✔✔is the expected future data that differ
among alternative courses of action.
, relevant cost - 🧠ANSWER ✔✔cost that is applicable to a particular decision
in the sense that it will have a bearing on which alternative the manager
selects.
Decision-making - 🧠ANSWER ✔✔is the process of studying and evaluating
two or more available alternatives leading to a final choice.
Avoidable cost - 🧠ANSWER ✔✔can be defined as a cost that can be
eliminated (in whole or in part) as a result of choosing one alternative over
another in a decision-making situation.
All costs are considered avoidable, except: - 🧠ANSWER ✔✔Sunk costs
Future costs
Relevant costs - 🧠ANSWER ✔✔are expected future costs which differ
between the decision alternatives
Sunk or historical costs - 🧠ANSWER ✔✔are never relevant in decisions
because they are not avoidable and therefore, they must be eliminated
from the manager's decision framework.
