Browse MBAs SECTION 2: Managerial & Cost Accounting

The Relevant Cost Identifier

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The Relevant Cost Identifier

For this decision, tell me which costs actually matter and which I should
ignore.

The decision: [DESCRIBE]
All the costs and figures on the table: [LIST EVERYTHING]

Sort them into:
1. Relevant costs — the ones that change with the decision (including
   opportunity costs)
2. Sunk costs — already spent, irrelevant, and often clung to emotionally
3. Unavoidable costs — will occur either way, so they don't discriminate
4. Opportunity costs I might be forgetting

Then give me the decision using only the relevant costs, and name the sunk
cost I'm most likely to let cloud my judgment.

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