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AHIP AHM-520 Exam - Topic 5 Question 52 Discussion

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:
B) Maintaining the existing staff
A) Adding new customer service representatives
C) Installing a new switching station
D) Installing additional phone lines

AHIP AHM-520 Exam - Topic 5 Question 52 Discussion

Actual exam question for AHIP's AHM-520 exam
Question #: 52
Topic #: 5
[All AHM-520 Questions]

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:

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Suggested Answer: B

by Olive at May 27, 2022, 03:48 PM

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Luis
11 months ago
I thought all these expenses were new costs, not sunk.
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Vernell
11 months ago
New phone lines are definitely a differential cost.
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Kami
11 months ago
Wait, how is maintaining staff a sunk cost?
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Alba
11 months ago
Totally agree, that makes sense!
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Krissy
11 months ago
Maintaining the existing staff is a sunk cost.
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Ardella
11 months ago
I recall that sunk costs are past costs that shouldn't affect current decisions. So, I lean towards option B, maintaining the existing staff, as it’s already spent.
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Raymon
11 months ago
This question feels familiar. I practiced a similar one where we had to identify costs in a business decision. I think maintaining the existing staff fits the sunk cost definition.
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Quinn
11 months ago
I'm not entirely sure, but I remember that sunk costs are costs that can't be recovered. Maybe it's the expense of maintaining the existing staff?
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Luis
12 months ago
I think the sunk cost might be related to maintaining the existing staff since those expenses are already incurred.
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Junita
12 months ago
This seems like a pretty straightforward networking question. I'm pretty confident I can figure this out.
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Jeniffer
12 months ago
I'm not entirely sure about this one. I'll have to review the course material to see if I can figure it out.
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