Which of the following statements is true?
A) Past costs are always relevant for decisions and are often useful in estimating future cost behaviour.
B) Past costs are always relevant for decisions, but are rarely useful in estimating future cost behaviour.
C) Past costs are never relevant for decisions, nor are they useful in estimating future cost behaviour.
D) Past costs are never relevant for decisions, but are often useful in estimating future cost behaviour.

Question

Quizplus · Accepted Answer

Past costs may not always be relevant for making current decisions as they are sunk costs that cannot be changed. However, past costs can often provide useful information for estimating future cost behavior such as trends in cost increases or decreases. Therefore, option D stating that past costs are never relevant for decisions but often useful in estimating future cost behavior is the best choice.

Which of the Following Statements Is True