Which of the following costs is the depreciation of equipment an example of?
A)a relevant cost
B)an opportunity cost
C)a sunk cost
D)a variable cost

Question

Quizplus · Accepted Answer

Depreciation of equipment is a sunk cost because it is a cost that has already occurred and cannot be recovered. It is not relevant to future decisions and is not affected by changes in production levels. It is also not an opportunity cost or a variable cost because it does not represent the cost of using one resource over another, nor does it change with changes in production levels.

Which of the Following Costs Is the Depreciation of Equipment