Sunk Costs Include Any Cost That

question 16

Multiple Choice

Sunk costs include any cost that:

• A)will change if a project is undertaken.
• B)will be incurred if a project is accepted.
• C)has previously been incurred and cannot be changed.
• D)will be paid to a third party and cannot be refunded for any reason whatsoever.
• E)will occur if a project is accepted and once incurred,cannot be recouped.

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Definitions:

Plantwide Overhead Rate

A single rate used to allocate manufacturing overhead costs to all units produced, regardless of the product line.

Cost Driver

A factor that causes the cost of an activity or process to change, used in activity-based costing to allocate costs.

Dual Rate

A cost allocation method that separates costs into fixed and variable elements, applying different rates for each in costing calculations.

Single Rate

A method used in cost accounting where a single overhead rate is applied to all units produced, regardless of the department in which they were produced or the resources they consumed.