Which of the following distinctions helps to explain the difference between relevant and irrelevant cost?
A)accounting cost vs.direct cost
B)historical cost vs.replacement cost
C)sunk cost vs.fixed cost
D)variable cost vs.incremental cost

Question

Quizplus · Accepted Answer

Historical costs are costs that have already been incurred, making them irrelevant for future decision-making. Replacement costs are the costs to replace an asset at the current time, which are relevant for making decisions.

Which of the Following Distinctions Helps to Explain the Difference