Which statement is true about relevant costs in incremental analysis?
A)All costs are relevant if they change between alternatives.
B)Only fixed costs are relevant.
C)Only variable costs are relevant.
D)Relevant costs should be ignored.

Question

Quizplus · Accepted Answer

Relevant costs in incremental analysis are costs that differ between the various alternatives being considered. It includes both variable and fixed costs. Therefore, option A is the true statement. Option B and C are incorrect because only considering fixed or variable costs can result in an incomplete analysis. Option D is also incorrect because relevant costs are the foundation of incremental analysis, and they should not be ignored.

Which Statement Is True About Relevant Costs in Incremental Analysis