What type of cost has occurred in the past and is irrelevant to future cost estimates?

The correct choice identifies a sunk cost, which refers to expenditures that have already been incurred and cannot be recovered. This cost is often considered irrelevant when making future financial decisions, as it does not impact future costs or benefits. Decision-makers typically focus on relevant costs—those that will be affected by future actions—while sunk costs should not sway their decisions since they will remain unchanged regardless of what choice is made moving forward.

In contrast, overhead costs encompass ongoing operational expenses and may need to be considered in future cost estimates. Depreciation costs reflect the gradual decrease in value of an asset over time and can influence future financial planning, depending on the remaining life and utility of the asset. Salvage costs relate to the estimated value that an asset will retain at the end of its useful life, which can indeed affect future financial decisions involving disposal or replacement of assets. Thus, only sunk costs fit the definition of costs that do not influence future expenditure assessments.