Which of the following costs are always relevant in decision making?
A) Variable costs.
B) Avoidable costs.
C) Sunk costs.
D) Fixed costs.

Question

Quizplus · Accepted Answer

Avoidable costs are always relevant in decision making because they are costs that can be eliminated if a particular decision is made. They directly impact the outcome of the decision, unlike sunk costs which have already been incurred and cannot be recovered, and fixed costs which do not change with the decision in the short term. Variable costs can be relevant, but not in all scenarios, especially if they do not change with the decision being made.

Which of the Following Costs Are Always Relevant in Decision