Costs that can be considered sunk costs over a ﬁxed period of time are called ____ costs.
A) Opportunity
B) Fixed
C) Incremental
D) Accounting
E) Erosion

Question

Quizplus · Accepted Answer

Sunk costs are costs that have already been incurred and cannot be recovered. Fixed costs, such as rent or salaries, are typically incurred over a fixed period of time and cannot be recovered once they have been paid. Therefore, fixed costs can be considered sunk costs over a fixed period of time. Option A (Opportunity costs) refers to the cost of forgoing the next best alternative, Option C (Incremental costs) refers to the change in cost resulting from a particular decision, Option D (Accounting costs) refers to the actual monetary cost of an item or activity, and Option E (Erosion costs) refers to the gradual loss of value or usefulness of an asset.

Costs That Can Be Considered Sunk Costs Over a ﬁXed