Asked by Pasha Harmidy on Apr 25, 2024
Verified
Differential costs can only be variable.
Differential Costs
The difference in total cost that will result from selecting one alternative over another.
Variable
A quantity or element that is subject to change, often used in mathematical equations or experiments to represent changeable factors.
- Acquire knowledge about the concepts of sunk costs, opportunity costs, differential costs, and how each one is differentiated from the others.
Verified Answer
JB
Jacob BuneaApr 29, 2024
Final Answer :
False
Explanation :
Differential costs can be either variable or fixed, depending on the specific cost being analyzed. A differential cost is any cost that differs between two alternatives. It can include both variable and fixed costs, such as direct materials, direct labor, and overhead costs.
Learning Objectives
- Acquire knowledge about the concepts of sunk costs, opportunity costs, differential costs, and how each one is differentiated from the others.
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