Question

In: Accounting

The costs that are unavoidable and remain unchanged no matter what have done is known as...

The costs that are unavoidable and remain unchanged no matter what have done is known as

Select one:

a. sunk costs

b. relevant costs

c. bunk costs

d. incremental costs

Clear my choice

题目9

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Expert Solution

Answer: A)

A) Sunk costs.

Reason: Sunk costs means the costs which are incurred by entity with no prospec of recovery, they are generally unavoidable in nature and are usually not taken as an important factor for consideration when a company is deciding upon a project viability.

Reasons why other options are incorrect:

B) Relevant costs: Relevant costs are avoidable in nature and hence is a wrong option, and their whole occurance depends upon the decisions taken by the company or the management.

C) Bunk costs: There are no such costs as bunk costs. The question gave this option to confuse the student.

D) Incremental costs: In general terms, incremental cost is the cost incurred by the company in manufacturing one extra unit, or incurring additional expense etc.,, These costs play a major ruole in decision making regarding projecs with different alternatives and options. So incremental cost is not related to the question

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ekkarill92 answered 2 years ago

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