Which of the following costs would be considered sunk costs?
A) CEO salary, not based on performance
B) Direct Labor wages
C) Yearly depreciation on factory equipment
D) Utilities expense
E) None of the above

Question

Quizplus · Accepted Answer

Sunk costs are costs that have already been incurred and cannot be recovered. Yearly depreciation on factory equipment is a sunk cost because it represents the allocation of the cost of the equipment over its useful life, and this cost has already been incurred.

Which of the Following Costs Would Be Considered Sunk Costs