Sunk Costs Are a Type of Incremental Cash Flow That

question 17

True/False

Sunk costs are a type of incremental cash flow that should be included in all capital-budgeting decisions.

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Definitions:

Direct Labor-Hours

The cumulative hours that employees engaged in the creation of products or services dedicate to their work.

Job-Order Costing

An accounting method used to track the costs associated with each unique job or order, suitable for customized or non-repetitive products.

Direct Labor Cost

The wages and other costs for labor that is directly involved in the production of goods.

Manufacturing Overhead

All manufacturing costs except direct labor and direct materials, including maintenance and utilities.