Question: For each the items below, indicate by placing an x in the appropriate column whether it should be considered a differential cost, an opportunity cost,

For each the items below, indicate by placing an x in the appropriate column whether it should be considered a differential cost, an opportunity cost, or a sunk cost.

Differential

Opportunity

Sunk

Item

Cost

Cost

Cost

1.

Cost of the new flat-panel displays.

2.

Cost of the old computer terminals.

3.

Rent on the space occupied by the registration desk.

4.

Wages of registration desk personnel....

5.

Benefits from a new freezer.

6.

Costs of maintaining the old computer terminals.

7.

Cost of removing the old computer terminals.

8.

Cost of existing registration desk wiring.

Note: The costs of the rent on the space occupied by the registration desk and the wages of registration desk personnel are neither differential costs, opportunity costs, nor sunk costs. These are costs that do not differ between the alternatives and are therefore irrelevant in the decision, but they are not sunk costs since they occur in the future.

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