What term describes past costs that have already been incurred and cannot be recovered or changed by any future decision?
ADifferential Costs
BOpportunity Costs
CSunk Costs
DIncremental Costs
Explanation
* Sunk Costs are irrecoverable past expenditures that should be ignored in rational future decision-making.
* Opportunity Costs represent potential benefits foregone when selecting one alternative over another.
* Confusing sunk costs with relevant costs leads to the sunk cost fallacy in capital budgeting.
Exam Relevance
- Topic: Managerial Accounting
- Subtopic: Relevant Costs

No Comments