Which of the following costs is relevant in a decision-making process?
A) prepaid insurance costs
B) historical costs
C) sunk costs
D) variable costs

Question

Quizplus · Accepted Answer

In a decision-making process, relevant costs are those that will be affected by the decision. Variable costs are relevant as they will vary based on the decision being made and will impact the overall profit or loss of the decision. Prepaid insurance costs, historical costs, and sunk costs are not relevant as they are already incurred and cannot be changed by the decision being made.

Which of the Following Costs Is Relevant in a Decision-Making