A cost incurred in the past and that cannot be recovered in the future is called ________.

Correct option is C

The correct answer is (c) sunk cost.

·         A sunk cost is a cost that has already been incurred in the past and cannot be recovered, regardless of future actions or decisions.

·         Sunk costs are irrelevant to current or future decision-making because they cannot be changed.

·         This concept is important in economics and business because it encourages decision-makers to focus on potential future costs and benefits, rather than costs that cannot be altered.

Additional Knowledge:

·         Economic cost: This includes both explicit and implicit costs, representing the opportunity cost of choosing one option over another.

·         Floating cost: Not a standard term in cost accounting or economics; it may refer to costs that vary or are not fixed, but it does not relate to past incurred costs.

·         Prime cost: A term in cost accounting that includes direct costs of production, such as direct labor and raw materials, but does not include past incurred costs.