Advertisements
Advertisements
Questions
Distinguish between shut down cost and sunk cost.
Give one difference between shut down cost and sunk cost.
Advertisements
Solution
- Shutdown costs are caused by temporary difficulties, such as a shortage of raw materials, whereas sunk costs result from past decisions that cannot be altered.
- While no work is done during the shutdown, fixed costs must still be paid; in contrast, work is done during the sunk cost period.
RELATED QUESTIONS
Write a short note on direct costs.
Total variable cost per unit increases ______.
It refers to the expenses incurred on those items which are not directly chargeable to production. Salaries of timekeeper, foremen and watchmen are examples of this cost. This cost is incurred for the concern as a whole rather than a particular product.
Direct cost increases when ______.
Distinguish between controllable and uncontrollable costs.
Distinguish between direct costs and indirect costs.
Amount spent to purchase a machinery is the example of ______ cost.
Variable cost per unit increases when ______.
A cost that is easily traceable to a cost object is known as ______.
Explain with an example the meaning of fixed costs.
