Asked by Andrea Perez on May 05, 2024
Verified
Which of the following costs are always irrelevant in decision making?
A) avoidable costs
B) sunk costs
C) opportunity costs
D) fixed costs
Sunk Costs
are past expenses that have already been incurred and cannot be recovered or changed, and thus should not affect future business decisions.
Avoidable Costs
Expenses that can be eliminated if a particular decision is made, not incurred in the absence of the decision.
Fixed Costs
Fixed costs are those expenses that do not change in total despite changes in the volume of goods or services produced or sold.
- Acknowledge the essential nature of considering opportunity and sunk costs when making decisions in business.
Verified Answer
AV
Ashish VermaMay 12, 2024
Final Answer :
B
Explanation :
Sunk costs are costs that have already been incurred and cannot be recovered, making them irrelevant to future decision making.
Learning Objectives
- Acknowledge the essential nature of considering opportunity and sunk costs when making decisions in business.