Contract costs for retiree benefits increases in retirement and health care provided in earlier contracts are known as _______ costs.
A) legacy
B) sunk
C) historical
D) inflation

Question

Quizplus · Accepted Answer

Legacy costs refer to the financial obligations of a company or organization that relate to past decisions or agreements, such as retiree benefits negotiated in earlier contracts. These costs can increase over time due to factors such as longer life expectancies and healthcare inflation. Sunk costs are costs that have already been incurred and cannot be recovered, historical costs refer to past expenditures, and inflation costs are a general increase in prices over time.

Contract Costs for Retiree Benefits Increases in Retirement and Health