An additional cost incurred only if a company pursues a particular course of action is a(n):

a. Period Cost

b. Sunk Cost

c. Incremental Cost

d. Discount Cost

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Beverley SmithLv2

17 Feb 2020

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Related questions

Label each of the following statements as either true (âTâ) orfalse (âFâ).

a) An opportunity cost is the potential benefit that is lost bytaking a specific action when two or more alternative choices areavailable.

b) A sunk cost will change with a future course of action.

c) An out-of-pocket cost requires a current and/or future outlayof cash.

d) Relevant costs are also known as unavoidable costs.

e) Incremental costs are also known as differential costs.

amberhorse512

1. Which of the following costs is not relevant in aspecial-order decision?
A. Direct labor
B. Direct materials
C. Variable overhead
D. Fixed overhead

2. Costs that change across decision alternatives are
A. accounting costs.
B. activity-based costs.
C. incremental costs.
D. capital costs.

4. The potential benefit of one alternative that is lost bychoosing another is known as a(n):
A. Sunk cost
B. Out-of-pocket cost
C. Differential cost
D. Opportunity cost

5. A cost that cannot be avoided or changed because it arisesfrom a past decision, and is irrelevant to future decisions, iscalled a(n):
A. Uncontrollable cost
B. Incremental cost
C. Opportunity cost
D. Sunk cost

6. An additional cost that is incurred only if a particularaction is taken is a(n):
A. Period cost
B. Pocket cost
C. Discount cost
D. Incremental cost

7. The payback period:
a. Is the length of time necessary to recover the entire cost of aninvestment from its resulting annual net cash flow.
b. Is the length of time necessary to recover the entire cost of aninvestment from its resulting annual net income.
c. Takes into consideration the profitability of an investment overits entire life, but ignores the timing of its future cashflows.
d. Takes into consideration both the profitability of an investmentover its entire life and the timing of its future cash flows.