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      Question

      When the cost is charged as expenses against the revenue

      of the period in which theyareincurred and not assigned to the products, it is known as _____
      A Opportunity Cost Correct Answer Incorrect Answer
      B Sunk Costs Correct Answer Incorrect Answer
      C Relevant Cost Correct Answer Incorrect Answer
      D Period Cost Correct Answer Incorrect Answer
      E Imputed cost Correct Answer Incorrect Answer

      Solution

      Period Costs are the costs, which are not assigned to the products but arecharged as expenses against the revenue of the period in which theyareincurred.   Product Costs arethecostswhichareassociatedwiththepurchaseandsaleofgoods(inthe case ofmerchandise inventory). Opportunity Cost refers to the value of sacrifice made or benefit ofopportunityforegoneinacceptinganalternativecourseofaction. Historicalcostsincurredinthepastareknownassunkcosts.Theyplaynoroleindecisionmakinginthecurrentperiod.

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