Sunk Costs Are Omitted from Decision Analysis

question 41

Multiple Choice

Sunk costs are omitted from decision analysis:

• A) sometimes.
• B) only if immaterial.
• C) always.
• D) never.

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Definitions:

Direct Labor Hours

The total hours worked by employees directly involved in the manufacturing process of a company's products.

Finishing Rate

The pace at which a production process or construction project is completed, often measured in units per hour or days per project phase.

Machine Hours

A measure of the amount of time a machine is operated, used in cost accounting to allocate expenses to products.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on their use of activities.