Question

Which among the following costs are not useful for managerial decision making?
a. Sunk Cost
c. Standard Cost
b. Marginal Cost
d. None of the above​

Answer 1

a. Sunk Costs are not useful for managerial decision making

Explanation for correct option:

• Sunk cost is not useful for managerial decision-making because it is already incurred and we can't recover it.

• An example of sunk cost is the money invested in marketing, employee's welfare or salary, equipment procurement etc.

• Managerial decisions can only be taken about money that is still to be invested and its amount can be increased or decreased.

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