Costs incurred before the split-off point are
A) sunk costs.
B) incremental costs.
C) relevant costs.
D) opportunity costs.

Question

Quizplus · Accepted Answer

Costs incurred before the split-off point are sunk costs, as they cannot be recovered or avoided after the split-off point. They are not relevant for decision-making in the post-split-off stage. Incremental costs, relevant costs, and opportunity costs are all costs that are incurred after the split-off point and are relevant for decision-making.

Costs Incurred Before the Split-Off Point Are