It's easy to imagine a scenario where fixed costs are not sunk; for example, equipment might be resold or returned at the purchase price. Individuals and businesses both incur sunk costs.
Fixed costs are expenses that do not vary with production levels, so they are incurred regardless of whether a business is producing anything or not. Here are some examples of fixed costs: These costs ...
Typically, direct fixed costs don't vary ... In other words, a variable cost can be an indirect cost. For example, a company produces mobile phones and has several production machines to ...
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