Asked by karter lector on Jun 26, 2024
Verified
A cost that will not be affected by later decisions is termed a
A) period cost
B) differential cost
C) sunk cost
D) replacement cost
Period Cost
Costs that are not directly tied to the production process and are expensed in the period in which they occur.
Differential Cost
The difference in cost between two alternative decisions or changes in output levels.
Sunk Cost
Sunk cost represents money already spent and permanently lost, which cannot be recovered and should not influence future financial decisions.
- Familiarize oneself with the concepts of sunk cost, differential cost, and opportunity cost during decision-making procedures.
Verified Answer
BM
Brandy McNishJul 01, 2024
Final Answer :
C
Explanation :
A sunk cost is a cost that has already been incurred and cannot be recovered or changed by future decisions. It is therefore important to not consider sunk costs when making decisions about future actions.
Learning Objectives
- Familiarize oneself with the concepts of sunk cost, differential cost, and opportunity cost during decision-making procedures.