Fill in the Blank QuestionFill in the blank question.Incremental or differential costs are costs in making decisions.

Incremental or differential costs are relevant costs in making decisions.

In the context of decision-making, relevant costs are those costs that will be directly affected by a specific decision. Incremental costs are additional costs that arise when a particular activity is undertaken, while differential costs refer to the difference in cost between two alternatives. These costs are crucial for managers to consider as they help assess the financial implications of various options. By focusing on relevant costs, decision-makers can avoid being swayed by sunk costs and other expenses that will not change regardless of the decision taken. This approach emphasizes the importance of forward-looking analysis in budgeting and operational planning.