Depreciation on existing equipment is special order analysis is considered to be:
A) a sunk cost
B) an opportunity cost
C) an avoidable cost
D) an incremental cost

Question

Quizplus · Accepted Answer

Depreciation on existing equipment is considered a sunk cost because it is a past cost that has already occurred and cannot be changed by any decision made now or in the future. It does not vary with the decision to accept or reject a special order.

Depreciation on Existing Equipment Is Special Order Analysis Is Considered