Multiple choice

The cost of replacing the old machine by a better machine is an example of

  1. opportunity cost

  2. relevant cost

  3. differential cost

  4. none of these

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

 It is an example of differential costing. It is the difference in total cost that will arise from selection of one alternative to another, when the old machine is replaced by a new one.

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