Construct an example of a sunk cost

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Question - Distinguish between a contribution and a functional income statement.

What is contribution margin? Contrast contribution margin with gross margin.

What is the unit contribution margin? How is it used in computing the unit break-even point?

What is the contribution margin ratio, and when is it most useful?

What is a sunk cost? Under what circumstances, if any, are sunk costs relevant to a decision? Construct an example of a sunk cost. Briefly discuss why you think financial reports for investors and managerial reports for managers may or may not differ in their treatment of sunk costs.

What is an opportunity cost? Under what circumstances are opportunity costs relevant to a decision? Construct an example of an opportunity cost. Briefly discuss why you think financial reports for investors and managerial reports for managers may or may not differ in their treatment of opportunity costs.

Why is a differential analysis of relevant items preferred to a detailed listing of all costs and revenues associated with each alternative?

Reference no: EM133060747

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