A company is considering replacing one of its old assets with a new one. The original purchase price of the old asset represents – Group of answer choices Relevant cost Differential cost Sunk cost Opportunity cost

A company is considering replacing one of its old assets with a new one. The original purchase price of the old asset represents – Group of answer choices Relevant cost Differential cost Sunk cost Opportunity cost

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter15: Lean Accounting And Productivity Measurement

Section: Chapter Questions

Problem 9DQ: What is the purpose of assigning facility costs to value streams, using a fixed price?

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Question

A company is considering replacing one of its old assets with a new one. The original purchase price of the old asset represents –

Group of answer choices

Relevant cost

Differential cost

Sunk cost

Opportunity cost

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Why is the original cost estimate corrected based on buyout data?