The Tolar Company has 400 obsolete desk calculators that are carried in inventory at a total cost of $26,800. If these calculators are upgraded at a total cost of $10,000, they can be sold for a total of $30,000. As an alternative, the calculators can be sold in their present condition for $11,200.
-What is the sunk cost in this situation?
A) $0.
B) $10,000.
C) $11,200.
D) $26,800.

Question

Quizplus · Accepted Answer

The sunk cost is the original cost of the calculators, $26,800, because it is a past cost that cannot be recovered regardless of the future action taken.

The Tolar Company Has 400 Obsolete Desk Calculators That Are