Certified Specialist Of Spirits Practice Exam

Which of the following costs are considered relevant when making a short-term business decision?

Sunk costs and opportunity costs Avoidable costs and opportunity costs Unavoidable fixed costs and sunk costs Sunk costs and future costs that do not differ between alternatives

Correct Answer:

Avoidable costs and opportunity costs

Explanation:

Relevant costs are those that differ between alternatives and occur in the future. Avoidable costs and opportunity costs are always relevant, whereas sunk costs are never relevant.

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