Question

Differential costs are: (CMA adapted) Multiple Choice the difference in total costs that result from selecting one choice instead of another. the profit foregone by selecting one choice instead of another. a cost that continues to be incurred in the absence of activity. a cost common to all choices in questions and not clearly allocable to any of them.

Answer 1

Answer:

The correct answer is letter "A": the difference in total costs that result from selecting one choice instead of another.

Explanation:

Differential cost is the result of subtracting the costs of two different options from where only one is to be selected. The concept is mostly used at the moment of producing when the firm must find out the difference in manufacturing one more unit of a good. Differential costs can be variable or fixed costs.