A cost that will not be affected by later decisions is termed a(n):
A) period cost
B) differential cost
C) sunk cost
D) replacement cost

Question

Quizplus · Accepted Answer

A sunk cost is a cost that has already been incurred and cannot be recovered, regardless of future decisions. It is irrelevant for future decision-making and should not be considered in determining the costs and benefits of future options. Period costs are recurring costs that are expensed in the period incurred, differential costs represent the difference in costs between two alternatives, and replacement costs reflect the cost of replacing an asset that has reached the end of its useful life.

A Cost That Will Not Be Affected by Later Decisions