Sunk costs
A)can be incremental or not incremental, depending on the decision to be made.
B)include all incremental costs to management decisions.
C)are costs that cannot be directly traded to a product, activity, or department.
D)None of these answer choices are correct.

Question

Quizplus · Accepted Answer

Sunk costs are costs that have already been incurred and cannot be recovered or changed by any current or future action. They are not incremental (since they do not change with the decision at hand), do not include all incremental costs (since incremental costs are those that change with the decision), and are not defined by their inability to be directly traced to a product, activity, or department.

Sunk Costs