Recently Graduated Business Student Decided to Open a Small Internet

Multiple Choice

recently graduated business student decided to open a small Internet café serving a variety of unusual nonalcoholic beverages from around the world.He carefully used all the pricing formulas he learned in school and set a goal to break even the first six months and make a moderate profit for the next six months,at which time he would review his pricing strategies.Within a week after opening,every seat was filled and he had to replenish his beverage orders several times.At his six-month review,he was devastated to find that despite huge sales,he had actually lost money.He realized it wasn't his "math" that was wrong; he forgot to include monthly expenses such as toilet paper,paper towels,hand soap,and trash removal fees in his calculations.These costs should have appeared as __________ in his break-even analysis.

A) fixed costs
B) marginal costs
C) variable costs
D) overhead costs
E) sunk costs