The difference in cost between two alternatives,such as to make a component part of a final product versus buying the part from an outside supplier is called:
A)Variable cost.
B)Differential cost.
C)Product cost.
D)Indirect cost.

Question

Quizplus · Accepted Answer

The difference in cost between two alternatives is called differential cost. It is the incremental cost that arises from choosing one alternative over the other. It helps in decision-making by identifying the cost savings or incremental cost that would result from choosing one alternative over the other.

The Difference in Cost Between Two Alternatives,such as to Make