Management accountants are frequently asked to analyze various decision situations including the following:

1. (1) Alternative uses of plant space, to be considered in a make/buy decision.
2. (2) Joint production costs incurred, to be considered in a sell-at-split-off-point-versus-process-further decision.
3. (3) Research and development (R&D) costs incurred in prior months, to be considered in a new-product-introduction decision.
4. (4) The cost of a special device that is necessary if a special sales order is accepted.
5. (5) The cost of obsolete inventory to be considered in a keep-versus-disposal decision.

The costs described in situations 1 and 4 above are:

a. discretionary cost

b. prime cost

c. relevant cost

d. fully-absorbed cost

e. sunk cost