Reference: 09-02
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.
-The sunk cost in this situation is?
A)$26,800.
B)$0.
C)$11,200.
D)$10,000.

Question

Quizplus · Accepted Answer

The sunk cost is $26,800, which is the original cost of the calculators. Sunk costs are past costs that cannot be recovered, regardless of future actions.

Reference: 09-02 Tolar Company Has 400 Obsolete Desk Calculators That Are Carried