Question

Which of the following is true of relevant costs? a.Relevant costs are past costs that do not differ from one alternative to another. b.Relevant costs have no effect on decision making. c.Relevant costs are sunk costs that alter future decisions. d.Relevant costs are future costs that differ across alternatives.

Answer 1

Answer:

D

Explanation:

Relevant cost are cost that affects future cash flows. Cost that differ across alternatives are also relevant but are known as variable cost. All variable cost are relevant but not all relevant cost are variable.