Which of the following costs should be ignored when choosing among alternatives?
A)Opportunity costs.
B)Sunk costs.
C)Out-of-pocket costs.
D)Differential costs.
E)Average cost.

Question

Quizplus · Accepted Answer

Sunk costs are irrelevant and should be ignored when choosing among alternatives because they are already incurred and cannot be recovered. The focus should be on relevant costs, such as opportunity costs, differential costs, and out-of-pocket costs. Average cost is a measure of past performance and not relevant to making future decisions.

Which of the Following Costs Should Be Ignored When Choosing