The cost of inventory currently owned by a company is an example of a (n):
A) opportunity cost.
B) sunk cost.
C) relevant cost.
D) differential cost.
E) future cost.

Question

Quizplus · Accepted Answer

Sunk costs are past costs that have already been incurred and cannot be recovered. The cost of inventory currently owned by a company is considered a sunk cost because it represents money that has already been spent and cannot be recovered, regardless of future actions.

The Cost of Inventory Currently Owned by a Company Is