- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 07 Aug 2018
Relevant cost, also known as differential cost, is an accounting term that is used to refer to costs that pertain to a particular decision. This means that those costs could be avoided depending on whether the decision is taken. Relevant costs will differ between the alternative options being considered.
By identifying the relevant costs that relate to a particular decision, cost information that is common to all options, and so not relevant to the decision can be removed; these are referred to as irrelevant costs. Time and effort can be saved by distinguishing between relevant and irrelevant costs when analysing options.
Relevant costs are typically considered in two categories:
- Future cost: The cost that will be incurred in the future as a result of the decision (If this future cost does not change based on the decision then it is an irrelevant cost).
- Opportunity cost: The amount that will be lost in terms of missed opportunities as a result of the decision.
 Find out more
 Related articles on Designing Buildings Wiki
Featured articles and news
Technology informs procurement and planning practices.
BSRIA releases market sector growth projections.
Designing for durability and resilience.
Do plans to connect infrastructure and housing stack up?
1 minute review of CAMRA’s guide to historic drinking dens.
Their complex heritage remains largely unknown.
New editor covered facilities management, operations and construction in the US.
Exclusive log cabins on the North Antrim coastline.
Proactive forestry for strategic water management.
CIOB urges construction to share PPE with healthcare providers.
Why not write that article you've always meant to?