Relevant costs for decision-making are those costs that:

Question

Quizplus · Accepted Answer

Relevant costs are costs that vary between alternatives and will have an impact on the decision being made. Fixed costs, such as rent or salaries, are not relevant because they will be incurred regardless of the decision made. Similarly, costs that are the same for all alternatives, such as sunk costs, are not relevant because they cannot be changed by the decision being made. Only costs that differ between the alternatives being considered should be taken into account when making a decision.

Relevant Costs for Decision-Making Are Those Costs That