A. Differential costs are costs that differ between or among alternatives. Benefits sacrificed due to selecting an alternative use of resources can function as differential costs in decision-making, if they differ between or among the alternatives being considered. However, the cost measurement of the benefits sacrificed due to selecting an alternative use of resources is not referred to most often as a differential cost.
B. Relevant costs are expected future costs that differ between or among alternatives. Only relevant costs should be considered in the decision-making process. Benefits sacrificed due to selecting an alternative use of resources can function as relevant costs in decision-making, if they differ between or among the alternatives being considered. However, the cost measurement of the benefits sacrificed due to selecting an alternative use of resources is not referred to most often as a relevant cost.
C. Sunk costs are costs that have been incurred and cannot be changed. The cost measurement of the benefits sacrificed due to selecting an alternative use of resources is never referred to as a sunk cost.
D. An opportunity cost is the contribution to income that is lost by not using a limited resource in its best alternative use. Benefits sacrificed due to selecting an alternative use of resources are most often referred to as opportunity costs.
