Sunk Costs _____

question 36

Multiple Choice

Sunk costs _____

• A) can only be measured in monetary terms.
• B) are opportunity costs.
• C) are marginal costs.
• D) lower the efficiency of production.
• E) should not be considered when making economic decisions.

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Definitions:

Direct Labor-hours

Direct labor-hours are the total time workers spend on producing a particular unit of goods or services.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual units of production based on a certain activity base, such as labor hours or machine hours.

Production Departments

Units or areas within a manufacturing facility where specific parts of the production process are completed.

Job-order Costing

An accounting method that tracks costs individually for each job, suitable for bespoke or custom orders.