The amount of increase or decrease in cost that is expected from a particular course of action as compared with an alternative is termed:
A) period cost
B) product cost
C) differential cost
D) discretionary cost

Question

Quizplus · Accepted Answer

Differential cost is the cost difference between two alternative courses of action. It helps in making decisions by analyzing the expected increase or decrease in cost. Therefore, option C is the correct answer. Option A refers to costs that are expensed in a particular time period. Option B refers to costs associated with manufacturing a particular product. Option D refers to costs that are incurred at the discretion of management.

The Amount of Increase or Decrease in Cost That Is