Which of the following is not relevant to management's decision regarding refinishing the tables or selling them as is?
A)The additional $300,000 revenue that can be generated if the tables are refinished.
B)The $355,000 manufacturing cost of the tables already incurred.
C)The additional $315,000 cost to refinish the tables.
D)The effect of selling "seconds" on Fancy's reputation as a fine-furniture manufacturer.

Question

Quizplus · Accepted Answer

The $355,000 manufacturing cost of the tables already incurred is a sunk cost and is not relevant to the decision regarding refinishing the tables or selling them as is. Sunk costs are past costs that cannot be recovered and should not influence future business decisions.

Which of the Following Is Not Relevant to Management's Decision