A florist paid $1,200 for 500 glass vases. The florist has used 300 of the glass vases and is holding the remaining 200 vases in inventory. The current market price for the 200 pieces of hardware is $600. What is the sunk cost of purchasing the vases?

Question

Quizplus · Accepted Answer

The sunk cost is the cost that has already been incurred and cannot be recovered. In this case, the florist has already paid $1,200 for the 500 vases, regardless of how many are used or held in inventory. Therefore, the sunk cost of purchasing the vases is $1,200. The current market price of the vases is irrelevant to the sunk cost. Choices A, B, and C are incorrect.

A Florist Paid $1,200 for 500 Glass Vases