Costs in Decision Making - Accounting

The video tutorial discusses decision making in business, focusing on three types of costs: differential, opportunity, and sunk costs. Differential cost is the difference between two alternatives, opportunity cost is the potential benefit lost when choosing one option over another, and sunk cost is an incurred cost that should not influence future decisions. Understanding these costs helps managers make informed decisions.

What is the goal of decision making according to the text?

Explain the concept of differential cost as described in the text.

What are opportunity costs and why are they important in decision making?

Define sunk cost and discuss its relevance in decision making.

What is the sunk cost fallacy and how can it affect business decisions?