Relevant Costs in Business Decisions

question 90

Essay

Relevant costs in business decisions
(a)Explain what is meant by each of the following terms: opportunity cost,sunk cost,and out-of-pocket cost.
(b)Identify which,if any,of the above three types of cost would be considered relevant in making a business decision.

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Definitions:

Gustatory System

The sensory system responsible for the perception of taste and flavor, including the taste buds on the tongue and associated neural pathways.

Rods And Cones

The two types of photoreceptor cells in the retina of the eye that are responsible for vision; rods detect light and darkness, while cones are responsible for color vision.

Salivary Gland

An exocrine gland in the mouth that produces saliva, which aids in digestion and helps maintain oral health.

Hair Cells

Specialized cells located in the inner ear that convert sound waves into electrical signals which can be interpreted by the brain.