Q379
Difference of cost, which occurs while considering alternatives can be classified as
A.
dependent cost
B.
independent cost
C.
incremental cost
D.
differential cost
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Difference of cost, which occurs while considering alternatives can be classified as differential cost. Differential cost is the difference between the cost of two alternative decisions, or of a change in output levels. The concept is used when there are multiple possible options to pursue, and a choice must be made to select one option and drop the others.