A Cost Important to the Decision-Making Process but NOT Recorded

question 16

Multiple Choice

A cost important to the decision-making process but NOT recorded in conventional accounting records is called a(n) :

• A) Sunk cost
• B) Standard cost
• C) Direct cost
• D) Opportunity cost

---

Definitions:

Economy Strong

A state wherein an economy is experiencing robust growth, low unemployment, and increasing levels of consumer spending and business investment.

Operating Leverage

Operating leverage describes the degree to which a company can increase its profits by increasing sales, reflecting the proportion of fixed costs to variable costs.

Sales Decrease

A reduction in the volume or value of sales within a company during a specific period compared to a previous period.

Profits Decrease

A reduction in the financial gains achieved by a business or investment over a specific period.