Accounting 231 Exam 4 Gill WSU
Question and answers correctly solved
2025/2026
Difference between Relevant and Irrelevant Costs -CORRECTANSWER Relevant Cost
affect future cash flows.
Irrelevant cost are not taken into consideration for decisions
What is a Differential Cost? -CORRECTANSWER A future cost that differs between any
2 alternatives
What is an Avoidable Cost? -CORRECTANSWER A cost that can be eliminated by
choosing one alternative over another in a decision. This term is synonymous with
differential cost and relevant cost
What is a Sunk Cost? -CORRECTANSWER A cost that has already been incurred and
cannot be changed by any decision made now or in the future
What is an Opportunity Cost? -CORRECTANSWER The potential benefit that is given
up when one alternative is selected over another.
What is an Allocated Common Cost? -CORRECTANSWER Cost that are assigned to
multiple different products, processes and activities.
Question and answers correctly solved
2025/2026
Difference between Relevant and Irrelevant Costs -CORRECTANSWER Relevant Cost
affect future cash flows.
Irrelevant cost are not taken into consideration for decisions
What is a Differential Cost? -CORRECTANSWER A future cost that differs between any
2 alternatives
What is an Avoidable Cost? -CORRECTANSWER A cost that can be eliminated by
choosing one alternative over another in a decision. This term is synonymous with
differential cost and relevant cost
What is a Sunk Cost? -CORRECTANSWER A cost that has already been incurred and
cannot be changed by any decision made now or in the future
What is an Opportunity Cost? -CORRECTANSWER The potential benefit that is given
up when one alternative is selected over another.
What is an Allocated Common Cost? -CORRECTANSWER Cost that are assigned to
multiple different products, processes and activities.
