Differential costs can:
A) only be fixed costs.
B) only be variable costs.
C) be either fixed or variable.
D) be sunk costs.

Question

Quizplus · Accepted Answer

Differential costs can be either fixed or variable. Differential costs are the difference in costs between two alternatives or options, and can include both fixed and variable costs. Sunk costs, on the other hand, are costs that have already been incurred and are not relevant to decision making.

Differential Costs Can