Multiple choice

The cost known as diiferential cost is

  1. incremental cost

  2. abandonment cost

  3. opportunity cost

  4. committed cost
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A Correct answer
Explanation

The differential costing is the extra cost of taking one course of action rather than another. The incremental cost is also the additional cost due to a change in the level or nature of business activity, so incremental cost is also known as differential cost. For instance extra or difference in cost by changing the channel of distribution.

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