Issue:
The main issue discussed in this research paper is to identify whether the cost used in taking decisions is relevant or irrelevant, and to choose between the best alternative which obtain a higher operating income than the other.
Methodology

A descriptive analytical approach was taken to conduct this study.
Source of information:
Secondary source of information was taken in account to collect relevant information about the topic
- Secondary: Books, Article, website, references, other study.

Findings:
Relevant cost
Relevant costs is “The costs appropriate to a specific management decision” A study of relevant costs and benefits helps make better decision
They are future costs and revenues.

– They are cash flows.

– They are incremental costs and revenues.
In order to qualify for relevancy, a cost must meet two criteria: (i) They affect the future and
(ii) They differ among alternatives.
Normally, the following are relevant Costs:
Differential cost:
A differential cost is the difference in cost items under two or more decision alternatives specifically two different projects or situations. Where same item with the same amount
Appears in all alternatives, it is irrelevant

Irrelevant cost:
Sunk costs: are past costs. These cannot be changed with any future decision.. It is a sunk cost and therefore irrelevant to the decision.
Measuring Relevant Costs and Revenues for Decision-Making:
The Meaning of Relevance:
The relevant costs and benefits required for decision-making are only those that will be affected by decision. Costs and benefits that are independent of a decision are obviously not relevant and need not be considered when making that decision. The relevant financial inputs for decision-making purposes are therefore future cash flows, which will differ between the various alternatives being considered. In other words,