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Managerial Accounting

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Computing Sunk Costs

MGRACT-KREX2E

A company has spent \$10,000 to produce chemical X, which it can sell for \$17,000. For another \$2,000, it can manufacture chemical Y, which can be sold for \$25,000. The amount of sunk cost is:

A

$2,000

B

$10,000

C

$8,000

D

$7,000