Asked by Genelyn Silva on May 14, 2024
Verified
An avoidable cost is a sunk cost that can be eliminated (in whole or in part)as a result of choosing one alternative over another.
Avoidable Cost
Costs that can be eliminated if a particular decision is made, such as discontinuing a product or service.
Sunk Cost
A cost that has already been incurred and that cannot be changed by any decision made now or in the future.
- Differentiate between costs that can be avoided and those that are sunk.
Verified Answer
HP
Haley PierceMay 19, 2024
Final Answer :
False
Explanation :
An avoidable cost is not a sunk cost; avoidable costs can be eliminated by choosing one alternative over another, whereas sunk costs have already been incurred and cannot be recovered.
Learning Objectives
- Differentiate between costs that can be avoided and those that are sunk.