Which of the following best describes relevant cost?
A) Future costs that do not differ between alternatives are relevant cost.
B) Sunk costs that do not differ between alternatives are relevant cost.
C) Sunk costs that differ between alternatives are relevant cost.
D) Future costs that differ between alternatives are relevant cost.

Question

Quizplus · Accepted Answer

Relevant cost refers to the cost that will change as a result of a decision. Hence future costs that differ between alternatives are the relevant cost. Sunk costs, which are costs that have already been incurred and cannot be recovered, are not relevant costs.

Which of the Following Best Describes Relevant Cost