Sunk Costs

question 124

Multiple Choice

Sunk costs

• A)can be incremental or not incremental, depending on the decision to be made.
• B)include all incremental costs to management decisions.
• C)are costs that cannot be directly traded to a product, activity, or department.
• D)None of these answer choices are correct.

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Definitions:

Damaged Goods

Items that are broken, defective, or impaired in some way, which typically reduce their value or usefulness.

Period-End Inventory

The total value of all inventory still available for sale by a company at the end of an accounting period.

Gross Profit

Gross profit is the difference between the sales revenue and the cost of goods sold, illustrating how much a company earns from selling its products before other expenses are deducted.

Cost Of Goods Available

The total cost of merchandise a company has for sale, which includes the beginning inventory plus the cost of goods purchased minus ending inventory.