Question

Which of the following costs are not relevant in a decision to continue or discontinue a

segment of the organization?
A. avoidable costs.
B. unavoidable costs.
C. opportunity costs.
D. differential costs.

Answer 1

Unavoidable costs, or sunk costs, are not relevant when deciding whether to continue or discontinue a segment because they cannot be recovered or changed and do not affect the decision-making process.

Step-by-step explanation:

Unavoidable costs, also known as sunk costs, are not relevant in a decision to continue or discontinue a segment of the organization because they have already been incurred and cannot be recovered or changed.

These costs do not change regardless of the decision made, so they do not impact the decision-making process. Instead, attention should be paid to avoidable costs, opportunity costs, and differential costs, which can be influenced by the decision and thus are considered relevant.