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Costs that are different under alternative choices are called? a. Irrelevant costs b. Sunk costs c....

Costs that are different under alternative choices are called?

a. Irrelevant costs

b. Sunk costs

c. Manufacturing costs

d. incremental costs

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Answer #1

Ans - Incremental costs (OPTION 'd')

Incremental costs differ between different alternatives. It is the extra cost associated with manufacturing one additional unit of production. It is an increase in cost when choosing an alternative. It is considered important and mainly used by management for decision making regarding change in level of activity, adding/sinking a product, change in product mix etc. Here sunk costs and other irrelevant costs which have already incurred and have no bearing on decision making are not included.

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