Question

Give one difference between Shut Down Cost and Sunk Cost.

Answer 1

Shut Down Costs	Sunk Costs
1. Sunk costs include expenses like investment in land and machinery, buildings etc.	1. Shut down costs include fixed costs and such as rent, insurance, depreciation etc.
2. Sunk costs are historical costs which have already been incurred.	2. Shut down costs are those costs which have to be incurred even if production or operation of an undertaking are discontinued temporarily due to strike or other reasons.