Costs incurred as a result of past irrevocable decisions and irrelevant to future decisions are called
A)opportunity costs.
B)sunk costs.
C)incremental costs.
D)marginal costs.

Question

Quizplus · Accepted Answer

Sunk costs are irrelevant to future decisions because they are costs that have already been incurred and cannot be recovered. Therefore, they should not be considered when making future decisions. Opportunity costs refer to the benefits foregone from choosing an alternative option, while incremental costs refer to the change in costs when choosing one alternative over another. Marginal costs refer to the cost of producing one additional unit of a product.

Costs Incurred as a Result of Past Irrevocable Decisions and Irrelevant