1.Sunken costs or Sunk costs are those costs that are incurred historically and cannot be changed. Sunks costs once incurred cannot be recovered.

These costs are considered irrelevant in short term operating decision making process.

Thus Sunken costs are historical costs that cannot be changed.

The solution is Option 3 -The Sunken costs are historical costs that cannot be changed.

The other options are incorrect due to the following :

Option 1 - costs that do not change with the size of the activity :

Costs that do not change with the size of the activity are fixed costs and not sunken costs.

Hence, this option is incorrect.

Option 2 - None mentioned :

The solution is mentioned in Option 3. Hence, this option is incorrect.

Option 4 – costs that can be allocated to the cost goal in a clear and simple way :

Costs that can be allocated to the cost goal in a clear and simple way are allocated costs and not sunk cost. Hence, this option is incorrect.

2.

marxist critique of accounting concludes that accounting directly supports capitalists measure realised profit as though it was surplus value extracted from their workers and that this is why the sum of profits equals total surplus value. It shows that Marx used his theory of accounting – his 'law of one cost' – to resolve the 'transformation problem' at the level of the firm, and it uses this theory to resolve other supposed problems – the critical distinction between 'productive' and 'unproductive' labour, and the problem of allocating 'joint costs', including fixed capital.

answer 3  arguments against regulation

* it act as a hidden tax on themarket

* Government regulations dull competitive market forces by erecting barriers to entry and forcing marginal firms out of the market

Regulations often act as a suppression on competition, creating monopolistic or quasi-monopolistic outcomes in the affected industries. To the extent that regulations impose costs that lead some firms to exit the market, or discourage entry into the market by entrepreneurial startups, regulations lead to a less competitive marketplace.

*Government regulations are a form of special interest protection and rent-seeking by the business community

* Government regulations are redundant, since the free market is self-regulating

*Government regulations threaten the rule of law and violate property rights, often subverting market forces to the arbitrary whims of bureaucratic decision makers

*Insiders gain advantage.

Regulatory programs are sometimes captured by businesses and other “interest groups,” who use them to promote their own end—such as restricting competition and suppressing innovation from new firms and business methods, or advancing their market power or political agendas. And even where regulations are well intended, they can produce unintended negative consequences. For example, drug regulation may delay the introduction of new, life-saving pharmaceuticals.

answer 4 the theory states that regulations are manipulated to fit the requirements of those affected by them. The theory suggests that over a given period of time regulations serve the interests of the industries concerned. This theory was designed by political scientists

Advantages of capture theory
The theory clearly explains the main intentions of designing regulations. The individuals to be affected by the regulations are directly involved in the formulation of these regulations. Therefore, there is adequate representation of the politicians as well as the interest groups since the regulations are drawn for their needs

Limitations of capture theory
The theory does not provide a significant difference from the public interest theory. The theory suggests that the public interest is the beginning of regulations. This is a similar suggestion postulated by the public interest theory ).

answer 5

What is the definition of Level 1 inputs?
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available.

What is the definition of Level 2 inputs?
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability. Level 2 inputs would include, for example, quoted prices for similar assets or liabilities.

What is the definition of Level 3 inputs?
Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs should be used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. However, the fair value measurement objective should remain the same; that is, an exit price from the perspective of a market participant that holds the asset or owes the liability.