AHIP Exam AHM-520 Topic 5 Question 90 Discussion

Actual exam question for AHIP's AHM-520 exam

Question #: 90
Topic #: 5

In order to achieve its goal of improved customer service, the Evergreen Health Plan will add three new customer service representatives to its existing staff, install a new switching station, and install additional phone lines. In this situation, the cost that would be classified as a sunk cost, rather than a differential cost, is the expense associated with:

AAdding new customer service representatives

BMaintaining the existing staff

CInstalling a new switching station

DInstalling additional phone lines

Show Suggested Answer

Suggested Answer: B

by Art at Jun 22, 2024, 10:54 PM

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Alecia

5 months ago

I agree with Joseph, the sunk cost would be the expense associated with installing a new switching station because it is a cost that has already been incurred and cannot be recovered.

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Gayla

6 months ago

D) Installing additional phone lines is the sunk cost. Once those lines are in place, the cost of maintaining them is a fixed expense that can't be avoided.

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Elvis

5 months ago

D) Installing additional phone lines

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Franklyn

5 months ago

C) Installing a new switching station

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Rikki

5 months ago

B) Maintaining the existing staff

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Ivory

5 months ago

A) Adding new customer service representatives

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Joseph

6 months ago

I think the sunk cost would be the expense associated with installing a new switching station.

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Nakita

6 months ago

Haha, I bet the person who wrote this question is an accountant who loves talking about sunk costs. The real sunk cost here is the time I'm spending on this exam!

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Bethanie

6 months ago

I disagree, I believe the sunk cost would be the expense associated with maintaining the existing staff.

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Ashton

6 months ago

I think the sunk cost would be the expense associated with adding new customer service representatives.

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Lemuel

6 months ago

I think the answer is B) Maintaining the existing staff. Maintaining the current staff is a necessary cost that will continue regardless of the changes made, so it's a sunk cost.

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Dalene

5 months ago

Adding new customer service representatives would be a differential cost since it is a new expense for the company.

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Valentine

5 months ago

I agree, maintaining the existing staff is a sunk cost because it will not change with the new additions.

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Ernest

6 months ago

The correct answer is C) Installing a new switching station. Once the investment has been made, the expense associated with the new switching station is a sunk cost that cannot be recovered.

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Jettie

5 months ago

That makes sense, once it's installed, it's a sunk cost.

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Jettie

6 months ago

C) Installing a new switching station

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