The difference in total costs between two alternatives is referred to as the
A) incremental cost.
B) sunk cost.
C) opportunity cost.
D) direct cost.

Question

Quizplus · Accepted Answer

Incremental cost refers to the difference in total costs between two alternatives. This helps in making decisions between different alternatives as it helps one to compare the costs of two alternatives and choose the one that is more cost-effective. Sunk cost refers to costs that have already been incurred and cannot be recovered, while opportunity cost refers to the cost of the missed opportunity of choosing an alternative. Direct cost, on the other hand, refers to costs that can be traced directly to a particular product or service.

The Difference in Total Costs Between Two Alternatives Is Referred