Which one of the following concepts is correct for determining relevant costs for short-term decision-making?
A) Differential.
B) Integrative.
C) Variable.
D) Subjective.
E) Absorption.

Question

Quizplus · Accepted Answer

The concept of differential cost is appropriate for determining relevant costs for short-term decision-making. Differential cost refers to the difference in cost between two alternatives being considered. It includes all incremental costs and forgone costs that are directly caused by a specific decision. By comparing the differential costs of different options, management can choose the one that provides the greatest benefit for the company. Thus, Option A is the correct choice. Option B, C, D, and E do not apply to short-term decision-making.

Which One of the Following Concepts Is Correct for Determining