Sunk costs:
A)Have already been incurred as a result of past actions.
B)Vary among the alternative courses of action being considered.
C)Are benefits that could have been obtained by following another course of action.
D)Result from unfavorable cost variances.

Question

Quizplus · Accepted Answer

Sunk costs are costs that have already been incurred and cannot be recovered or changed, regardless of the future course of action. Option B is incorrect because sunk costs are not varying costs, and option C is incorrect because sunk costs do not refer to the benefits that could have been obtained by choosing a different course of action. Option D is incorrect because sunk costs are not related to cost variances.

Sunk Costs