Relevant Costs

1. Relevant costs are future costs that will change as a result of selecting different alternatives. Costs that will not change as a result of selecting different alternatives are not relevant because they will not impact the total costs that will result from the decision. See also sunk costs. A cost that should be considered in choosing among alternatives. Only those costs yet to be incurred (future costs) that differ among the alternatives (differential costs) are relevant in decision making.