1) A cost that has been incurred in the past, cannot be recouped, and is not relevant to future decisions is termed a a....
1) A cost that has been incurred in the past, cannot be recouped, and is not relevant to future decisions is termed a
a.replacement cost
b.sunk cost
c.period cost
d.differential cost
2) The revenue that is forgone from an alternative use of an asset, such as cash, is called
a.differential profit
b.opportunity cost
c.sunk cost
d.differential revenue
Homework Answers
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1. Option B is the answer Sunk cost is the cost which was already incurred and is not expected to be recovered in the future |
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2. Option B is the answer Opportunity cost Iis economic benefit foregone from selecting an alternative |
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1) A cost that has been incurred in the past, cannot be recouped, and is not relevant to future decisions is termed a a....
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Kindly provide an explanation as to what are the main concepts pertaining to arriving at relevant costing and discuss how these principles might apply to a manufacturing company. Answer: A relevant cost is a current or future cost that will differ among alternatives. For example, relevant cost of material is the raw material cost that needs to be considered while taking a managerial decision. Relevant cost of material may be in the form of incremental cash flows or opportunity cost....
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