Description
Classify already-incurred and unavoidable costs as sunk, any avoidable cost as avoidable-incremental, and the remaining case as unavoidable-future.
An economic model term depends on the chosen price basis, quantities, reference period, and behavioral assumptions. A supplied arithmetic component does not establish a causal economic effect or a complete model equilibrium.
Classify already-incurred and unavoidable costs as sunk, any avoidable cost as avoidable-incremental, and the remaining case as unavoidable-future.
When to use this tool
Use Sunk Vs Incremental Cost Label when you need one explicitly defined economic accounting or model component.
How to use the tool and how it works
- Enter avoidableIfCancelled, alreadyIncurred. Use the units and conventions below.
- Run the tool. Correct any format, range, or cross-field input error before interpreting the output.
- Read label. Use the output convention below.
Classify already-incurred and unavoidable costs as sunk, any avoidable cost as avoidable-incremental, and the remaining case as unavoidable-future.1
| Input field | Meaning and units | Accepted input |
|---|---|---|
| avoidableIfCancelled | Avoidable If Cancelled | Required. Boolean. |
| alreadyIncurred | Already Incurred | Required. Boolean. |
| Output field | Interpretation | Returned shape |
|---|---|---|
| label | Formatted label for the supplied components under the convention above. | Required. Text; maximum UTF-16 length 8192. |
{
"input": {
"avoidableIfCancelled": false,
"alreadyIncurred": true
},
"output": {
"label": "sunk"
}
}Limitations and assumptions
- The flags are supplied and avoidability takes precedence; actual contractual obligations, opportunity costs, or an investment decision are not analyzed.
- Inputs must satisfy both the field types and the cross-field conditions above. Invalid input causes an error; a successful false flag or documented placeholder is a different result.
Alternative or Complementary methods
Review the complete model, data definitions, and reference prices before interpreting the result.
References
Similar or alternative tools
- Simple Cash Breakeven Unit Margin
Divide fixed cost by the positive unit margin for breakEvenUnits.
- Benefit Burden Person Share
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