A Cost That Will Not Be Affected by Later Decisions

question 154

Multiple Choice

A cost that will not be affected by later decisions is termed a(n) :

• A) period cost
• B) differential cost
• C) sunk cost
• D) replacement cost

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Definitions:

Gross Margin

A company's revenue minus its cost of goods sold, indicating how efficiently a company uses labor and supplies in production.

Differential Costs

The change in total costs that results from choosing one alternative over another in decision-making processes.

Committed Fixed Cost

Long-term, fixed costs that a business incurs from entering into long-term contracts or having fixed assets, which are not easily altered in the short term.

Taxes On Real Estate

Levies imposed by government entities based on the assessed value of real estate property.