The Term Differential Cost Refers To

question 8

Multiple Choice

The term differential cost refers to:

• A)a cost which continues to be incurred even though there is no activity.
• B)a cost which does not entail any dollar outlay but which is relevant to the decision-making process.
• C)a difference in cost between any two alternatives.
• D)the potential benefit forgone by selecting one alternative instead of another.

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Definitions:

Payments

The act of transferring money from one party to another in exchange for goods, services, or to fulfill a legal obligation.

Loan

A sum of money that is borrowed, usually from a financial institution, which requires repayment with interest over a set time frame.

Invested Funds

Money allocated into financial ventures with the expectation of achieving a profit or gaining an income.

Accumulate

The process of gathering or increasing an amount of something over a period of time.