Relevant Cost Vs Irrelevant Cost
This distinction between relevant and irrelevant costs is based on the fact that the relevant cost refers to costs that may be avoided while the irrelevant cost refers to those costs that can't be avoided in a corporation or business and are thus referred to as fixed costs.
For example, a cost that differs from location to location may be a relevant cost. To determine the relevant cost, judgments are made based on future expenses and not on the past costs. A decision's preventable costs are considered to be relevant expenses.
A cost that is always the same, no matter what decisions are made or actions done, is known as an irrelevant cost. For the most part, they are ignored when it comes to doing a cost-benefit analysis. A buried cost and a constant cost are two of the most common types of irrelevant costs, depending on their features.
Comparison Table Between Relevant Cost and Irrelevant Cost
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