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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
Submitted by: mcqstutor Team More Finance & Accounting MCQs →

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