Costs irrelevant to the decision

Costs that are irrelevant to a decision are a business cost category . This is understood to mean those costs that are not influenced by the implementation of an alternative course of action.

Costs that are irrelevant to the decision cannot be defined in absolute terms, but are determined by the respective decision context. For example, when deciding to alternatively cover a certain distance by car or train, the full cost rate for the car does not have to be taken into account, but only costs for the fuel used and, if applicable, a proportion of wear and tear. Costs for depreciation, insurance or vehicle taxes are incurred regardless of the decision and are therefore irrelevant to the decision.

A special subcategory of the decision irrelevant costs are the sunk costs ( sunk costs ). These are are costs that have resulted in past periods to payments and thus have for most decision-making situations not relevant.

The decision-relevant costs represent the opposite of decision-irrelevant costs .