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Presented Below Are Terms Preceded by Letters (A)through (F)and Followed

Question 138

Matching

Presented below are terms preceded by letters (a)through (f)and followed by a list of definitions 1 through 6.Match the letter of the terms with the definitions.Use the space provided preceding each definition.

Premises:
An additional cost incurred only if a particular action is taken.
An avoidable cost.
The incremental revenue generated by selecting a particular course of action over another.
A cost that requires a current outlay of cash.
The potential benefits of one alternative that are lost by choosing an alternative course of action.
A cost that cannot be avoided or changed in any way because it arises from a past decision; irrelevant to current and future decisions.
Responses:
Opportunity cost
Sunk cost
Relevant benefits.
Out-of-pocket cost
Incremental cost
Relevant cost

Correct Answer:

An additional cost incurred only if a particular action is taken.
An avoidable cost.
The incremental revenue generated by selecting a particular course of action over another.
A cost that requires a current outlay of cash.
The potential benefits of one alternative that are lost by choosing an alternative course of action.
A cost that cannot be avoided or changed in any way because it arises from a past decision; irrelevant to current and future decisions.
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