Question

which of the following is not a possible alternate term for costs that can be eliminated by taking a specified course of action?
multiple choice
relevant costs
avoidable costs
opportunity costs
differential costs

Explanation:

• Relevant costs: Costs that are relevant to a decision, which can be eliminated by taking a specific course of action.
• Avoidable costs: Costs that can be avoided (eliminated) if a particular course of action is taken.
• Opportunity costs: The cost of the next - best alternative forgone. It is not a cost that is directly eliminated by a course of action in the sense of a cost that was previously being incurred.
• Differential costs: The difference in costs between two alternatives. These can be costs that are eliminated (if one alternative has a cost that the other does not).

Answer:

C. Opportunity costs