A Cost That Has Already Been Made and Cannot Be

question 201

Multiple Choice

A cost that has already been made and cannot be recovered is called a

• A) variable cost.
• B) fixed cost.
• C) sunk cost.
• D) marginal cost.

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Definitions:

Safety Stocks

Extra inventory kept to prevent stockouts and ensure adequate supply in the face of demand or supply variability.

Restocking Costs

Expenses associated with replenishing inventory, including purchasing, shipping, and handling costs.

Collection Policy

The set of guidelines a company uses to monitor and manage the collection of accounts receivable or owed debts.

Receivables Policy

A set of guidelines a company follows to manage its accounts receivable, including credit terms, collection methods, and credit limits.