Part $3$: Incremental Analysis

In talking with both customers and other business owners, Mr$.$ Suncat has been wondering about several different business opportunities and has asked you for your recommendation on each of them.

First, though, Mr$.$ Suncat asks you to define the following cost terms.

Define:

Avoidable Cost:

Unavoidable Cost:

Relevant Cost:

Irrelevant Cost:

Sunk Cost:

Opportunity Cost:

Next, Mr$.$ Suncat asks you to classify the following costs as a relevant cost or an irrelevant cost and then identify the type of cost $($sunk$,$ fixed, variable, or opportunity$)$ assuming that he is considering the possibility of opening a second bakery.

$\backslash$table$[[$Cost$,\backslash$table$[[$Relevant$],[$or Irrelevant?$]],\backslash$table$[[$Sunk$,$ Fixed, Variable,$],[$or Opportunity?$]]],[$Mortgage on the Cake Shop,,$],[$Wages for the Bakers,,$],[$Mr$.$ Suncat's culinary school tuition $($paid off in $2018),,],[$Icing for the wedding cakes,,$],[$Striping the parking lot in front of the Cake Shop last year,,$],[$Mr$.$ Suncat's decision not to attend graduate school,,$]]$