A company has incurred development costs of RM25,000 to date on a proposed new product. Further costs of RM18,000 would be required to complete the development of the product.

In deciding whether to continue with the new product development which of the following is correct regarding development costs?

Sunk cost Incremental cost

A RM 0 RM 43,000

B RM 18,000 RM 25,000

C RM 25,000 RM 18,000

D RM 43,000 RM 0