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Sunk cost is that cost which is incurred in past so in decision making process any cost which is incurred in past has no effect on future events and due to which all fixed cost which are also incurred in past has no effect in future that's why it is not relevent for decision making process, so for decsion making point of view yes fixed cost is sunk cost.
What else can I help you with?
Is fixed cost the same as indirect cost?
NO both are not same as fixed cost is cost which remains fixed with change in production level while indirect cost is that cost which is not directly related for the production of units.
What is an example of fixed cost?
Rent is a fixed cost it is any cost that stays the same every month.ANSWERinsurance
Costs that are unaffected by the quantity of product sold are costs.?
Those are Fixed Cost - costs which must be paid for any output level (sunk costs)
Why is the sunk cost is unavoidable cost?
Sunk cost is that cost which is incurred in past and it is unavoidable because any past decision or action cannot be reversed.
What is the distinction or differences between an incremental cost and sunk cost?
incremental cost are defined as the change in overall cost that result from particular decision making. it include both fixed cost and veriable cost. sunk cost are those cost which are made once and for all can't be altered incremental or decreased by varying the rate of output, nor can they be recovered. for example - once it is decided to make incremental investment expenditure and the fund are allocated and spend
What is the difference between sunk cost and fixed costs?
A fixed cost is a cost that will not change in total regardless of output. For example, no matter how much output you produce, rent expense is generally going to remain unchanged. A sunk cost is a cost that has already been incurred, and thus shouldn't factor into management decisions. For example, if you were making a decision about whether to manufacture a material rather than buy it from an outside provider, you would only care about which costs would change as a result of the decision. Any costs that would be the same regardless of whether you make or buy would be considered sunk costs.
Examples of non relevant cost?
Examples are Sunk Costs, Fixed costs and Allocated Costs.
Is fixed cost the same as indirect cost?
NO both are not same as fixed cost is cost which remains fixed with change in production level while indirect cost is that cost which is not directly related for the production of units.
What is an example of fixed cost?
Rent is a fixed cost it is any cost that stays the same every month.ANSWERinsurance
What is a cost structure?
The expenses that a firm must take into account when manufacturing a product or providing a service. Types of cost structures include transaction costs, sunk costs, marginal costs and fixed costs. The cost structure of the firm is the ratio of fixed costs to variable costs.
Costs that are unaffected by the quantity of product sold are costs.?
Those are Fixed Cost - costs which must be paid for any output level (sunk costs)
Why is the sunk cost is unavoidable cost?
Sunk cost is that cost which is incurred in past and it is unavoidable because any past decision or action cannot be reversed.
What is the distinction or differences between an incremental cost and sunk cost?
incremental cost are defined as the change in overall cost that result from particular decision making. it include both fixed cost and veriable cost. sunk cost are those cost which are made once and for all can't be altered incremental or decreased by varying the rate of output, nor can they be recovered. for example - once it is decided to make incremental investment expenditure and the fund are allocated and spend
If fixed cost do not change then the marginal cost?
Contrast to what we would normally think, changes in fixed costs do not affect marginal cost. For example, if a product costs $10 to produce, and the fixed cost goes up to $25, then marginal cost stays the same.
Does per unit fixed cost vary?
Yes fixed cost varies between units as total overall fixed cost amount remains same but increase in number of units change the per unit fixed cost for example fixed cost of 10 will be 10 per unit in case of 1 unit produce and fixed cost per unit will be 1 in case of 10 units produced.
What are sunk costs?
In economics and business decision-making, sunk costs are costs that cannot be recovered once they have been incurred. Sunk costs are sometimes contrasted with variable costs, which are the costs that will change due to the proposed course of action, and prospective costs which are costs that will be incurred if an action is taken. In microeconomic theory, only variable costs are relevant to a decision. Economics proposes that a rational actor does not let sunk costs influence one's decisions, because doing so would not be assessing a decision exclusively on its own merits. The decision-maker may make rational decisions according to their own incentives; these incentives may dictate different decisions than would be dictated by efficiency or profitability, and this is considered an incentive problem distinct from a sunk cost problem. In decision making one should also consider fixed proportion of the sunk costs. Lets take an example of a market which has a free entry. There are several firms in the market operating profitably, but if high proprotions of sunk cost in this market are fixed costs then others firms would hesitate to enter into that market while on the other hand if very low proportion of sunk cost are fixed costs for the same market, firms would love to enter into that market.
What are the fixed costs that one should allow for when budgeting?
A fixed expense is a cost or overhead that remains the same each week, fortnight, month, quarter or year. An example of a fixed cost would be rent or a fixed mortgage repayment.
