A Cost That Does Not Change Between the Alternatives Is

question 84

True/False

A cost that does not change between the alternatives is known as a differential cost.

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Definitions:

Sunk Costs

Costs that have already been incurred and cannot be recovered, and thus should not affect future business decisions.

Future Costs

Costs that will be incurred in the future, impacting decisions on investments, production, and other business activities.

Relevant

Relates to or directly impacts the subject under discussion.

Fixed Costs

Expenses that do not change with the level of production or sales over a short period, such as rent, insurance, and salaries.