A cost incurred in the past that is not relevant to any current decision is classified as a(n) :

A) period cost.
B) opportunity cost.
C) sunk cost.
D) differential cost.

Question

A cost incurred in the past that is not relevant to any current decision is classified as a(n) :A)  period cost.B)  opportunity cost.C)  sunk cost.D)  differential cost.

Lilly Earley · Accepted Answer

Final Answer : C, Explanation :  A sunk cost is a cost that has already been incurred and cannot be recovered or changed. It is not relevant to any current or future decision because it is already sunk or gone. Period costs are expenses that are not related to the production of goods or services and are expensed in the period they are incurred. Opportunity costs are the benefits forgone by choosing one alternative over another. Differential costs are the difference in costs between two alternatives.

A cost incurred in the past that is not relevant to any current decision is classified as a(n) :

A) period cost.
B) opportunity cost.
C) sunk cost.
D) differential cost.

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Learning Objectives

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