Explain a situation you have observed (or read about) in which a firm made a decision considering irrelevant costs or did not consider relevant costs. What was the outcome of the decision, and what could have been done differently?

Let us take the behavior of a coffee shop and how costs were incurred. There may situations where there was not enough information to justify all the costs. If you were the owner of this shop or any other small business, what kind of specific information would you collect, how would you analyze the information and how would you use that information to execute cost decisions? Sometimes, costs may not necessarily be the driving force to attract more customers. You may want to put in packages to entice customers to be regular customers. How would you justify incurring costs that are intended to attract customers but not necessarily be justified from an accounting or cost-causation perspective (i.e., costs directly related to making and serving coffee)?