A cost that cannot be avoided or changed because it arises from a past decision, and is irrelevant to future decisions, is called a(n):
A) Uncontrollable cost.
B) Incremental cost.
C) Opportunity cost.
D) Out-of-pocket cost.
E) Sunk cost.

Question

Quizplus · Accepted Answer

A sunk cost is a cost that has already been incurred and cannot be recovered or changed. It is irrelevant to future decisions because it will not change regardless of the decision made. Therefore, option E is the correct answer. The other options (A, B, C, D) refer to costs that are still relevant and can be influenced by future decisions.

A Cost That Cannot Be Avoided or Changed Because It