Which of the following is a true statement about costs in incremental analysis?
A)Variable costs are always relevant.
B)Fixed costs are never relevant.
C)Fixed costs are always relevant.
D)Both variable and fixed costs can be relevant.

Question

Quizplus · Accepted Answer

Both variable and fixed costs can be relevant in incremental analysis. Relevant costs are costs that will be affected by a specific decision, and both variable and fixed costs can be impacted by various decisions. Therefore, it is important to consider both types of costs when conducting incremental analysis.

Which of the Following Is a True Statement About Costs