The Difference in Total Costs Between Two Alternatives Is Referred

question 38

Multiple Choice

The difference in total costs between two alternatives is referred to as the

• A) incremental cost.
• B) sunk cost.
• C) opportunity cost.
• D) direct cost.

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Definitions:

Cost-to-retail Percentage

A method used in inventory valuation that compares the cost of goods to their retail price to calculate inventory value.

Purchases Returns

Goods returned by the buyer to the supplier due to defects, damage, or other reasons, which can reduce the total amount of purchases.

Retail Inventory Method

An accounting technique used in retail to estimate the ending inventory value based on the relationship between the cost and selling price of goods.

Cost-to-retail Ratio

A method used in inventory accounting that estimates the value of ending inventory by calculating the cost to retail price ratio.