Sunk cost is a past cost in accounting. Usually the cost of purchasing machineries is termed as sunk cost with some conditions. Just for example you purchased a machine with 20000 dollar to manufacture product. It is able to save 10000 dollar in its useful life from other cost. After a few days you sold this with 14000 dollar. You gained 4000 dollar. But in this case 20000 dollar is considered as sunk cost.
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