Question

Which of the following costs are always irrelevant in decision making? A. sunk costs B. opportunity costs C. fixed costs D. avoidable costs

Answer 1

Irrelevant costs are those that will not change in the future when you make one decision versus another. Examples of irrelevant costs are sunk costs, committed costs, or overheads as these cannot be avoided.

Sunk Cost : A sunk cost is a cost that an entity has incurred, and which it can no longer recover. Sunk costs should not be considered when making the decision to continue investing in an ongoing project, since these costs cannot be recovered

So Oprion A Sunk Cost in Irrelevant cost