Yummy granola is considering selling premium granola. it already sells regular for $6.75/pound and would sell premium granola for $9.50/pound. the cost for organic grains for the premium granola would be $1.15/pound. a cost that would not be considered in this decision would be

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Business

Helena Koch

11 March, 10:05

Yummy granola is considering selling premium granola. it already sells regular for $6.75/pound and would sell premium granola for $9.50/pound. the cost for organic grains for the premium granola would be $1.15/pound. a cost that would not be considered in this decision would be

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Ezekiel Robbins · Answer 1

Yummy granola is considering to sell premium granola. Since it wants to sell premium granola, it has to consider $1.15/pound as his cost for the decision making. Only the relevant cost should be considered for the decision making process.

The cost which will not be considered for selling premium granola is the cost incurred on regular granola like refining it. Cost incurred on refining the regular granola is an irrelevant cost which will not be considered for decision making.