The cost which is irrelevant for decision making process and is to be incurred even if the given alternative is not being selected is known as irrelevant cost. Such cost includes (Horngren, Datar and Rajan, 2012)
Absorbed fixed cost-The cost which has been fixed irrespective of the level of output is known as fixed cost and is to be incurred in all the alternatives and hence not relevant for managerial decision making. If the fixed cost is specifically incurred for the specific alternative against other, it will come under the category of relevant cost.
Historical Cost- The cost which has been already incurred in the past and hence considered to be as sunk cost. As the cost cannot be recovered while selecting any option in present and hence cannot be recovered. Land purchased in past is known as sunk cost which is irrelevant for decision making.
Committed cost- The cost which is to be incurred and is committed by the management to be incurred irrespective of the decision taken is known as committed cost.
Hence, as the name suggests, the relevant cost are relevant for decision making while irrelevant cost are not relevant for decision making process.