Relevant costs are dependent on the decision. A sunk cost is a cost that has already been paid for whereas an opportunity cost is a prospective return that has not yet been earned. Optimal Decision Making And Opportunity Costs Video Khan Academy The loss of existing profits will occur only if customers order is accepted. . It is a potential benefit or income that is given up as a result of selecting an alternative over another. The concept is somewhat the same in economics as well as accounting. Let us look at how economic costs can differ from accounting costs in the treatment. The concept of opportunity cost is applied in various management accounting areas including. The opportunity cost attempts to quantify the impact of choosing one investment over another. On the other hand financial accounting helps us. What is the opportunity cost. The major difference between sunk cost and opportunity cost is that...
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