Which of the Following Represents a Sunk Cost

question 155

Multiple Choice

Which of the following represents a sunk cost?

• A)A historical cost that is always relevant
• B)A historical cost that is never relevant
• C)An outlay expected to be incurred in the future
• D)A cost that is relevant to any decision

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Definitions:

Overtime Expense

Overtime expense refers to the additional costs incurred by an employer for paying employees at higher rates for working beyond their normal hours.

Product Warranty

A guarantee from the manufacturer or seller that a product will meet certain quality and reliability standards or that defective products will be repaired or replaced.

Warranty Obligations

The responsibility of a seller to repair or replace defective goods during a specified period.

Quarterly Entries

are journal entries made in the financial records at the end of each quarter, summarizing the period’s transactions and adjustments.