Give opinion:

In analyzing the decision of the two partners at Summer Lawn Care on whether or not to change their businesses name to Lawn and Tree Care, many costs need to be taken into consideration by the two owners. The easiest way to breakdown the cost involved in their decision is to divide cost into relevant costs (incremental costs) and irrelevant costs (nonincremental costs). Douglas (2012) differentiates between the two stating, Incremental costs are often called relevant costs since they are the costs that are relevant to the decision that is to be made, as distinct from the irrelevant costs that will be incurred regardless of the decision to be made (Incremental Cost and Revenue para. 5). Exploring these costs and they would impact a name change will point the two owners in the right direction.

Give opinion:

Unnecessary costs are costs not relevant to a decision to be made. Insignificant costs include both foreseeable and sunken costs. Unavoidable costs are contractually binding and include executive compensation and leasing fees for facilities and installations (Douglas, 2012). Sunken costs are expenses that were incurred beforehand and can not be recovered (Douglas, 2012). Examples of sunken costs, in this case, would include the costs of Yellow Pages for business cards, vehicle paint, signs, and advertising. A significant distinction between sunken costs and fixed costs is that sunken costs have already been accrued and can not be recovered.