For the purpose of a make-or-buy decision at Kaduna Steel Works Limited, which cost classification is MOST relevant to management?

Differential (incremental) cost represents the change in total cost resulting from choosing one alternative over another, making it the most relevant classification for make-or-buy decisions. Historical costs and sunk costs are irrelevant because they have already been incurred and cannot be changed. Absorbed overhead includes arbitrary fixed cost apportionments that may distort the decision.