Sunk costs, unitising costs, how costs are allocated, and leaving out opportunity costs are all factors where errors are often made, and will ultimately affect the outcome of the decision.

Sunk Costs

Costs that have already been incurred and cannot be recovered, and therefore should not influence future business decisions.

Opportunity Costs

The cost of the next best alternative that is foregone when a decision is made.

Unitising Costs

The process of breaking down costs into smaller, individual pieces or units to better analyze and manage them.