Which of the following is not relevant in decision making?
A) opportunity costs
B) differential costs
C) sunk costs
D) variable costs

Question

Quizplus · Accepted Answer

Sunk costs are costs that have already been incurred and cannot be recovered. They should not be considered in decision making as they cannot be changed or influenced by current decisions. Therefore, they are not relevant in making decisions. A, B, and D are all relevant factors in decision making. Opportunity costs are the potential benefits that are forgone when making a particular decision. Differential costs are the incremental costs that arise from making a certain decision versus another. Variable costs are costs that vary with the level of output or activity.

Which of the Following Is Not Relevant in Decision Making