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Variable costs are irrelevant whenever they do not differ among the alternatives at hand. do you agree?
Any cost whether variable cost or fixed cost is irrelevant if not different between alternatives at hand.
Are fixed costs always irrelevant?
No fixed costs are not always irrelevant. Some fixed costs may differ among the alternatives and hence will be relevant. e.g. When figuring the incremental cost of the more expensive car, the relevant costs would be the purchase price of the new car (net of the resale value of the old car) and the increases in the fixed costs of insurance and automobile tax and license.
What is the difference between overhead cost and fixed cost?
Fixed cost is a cost that does not typically vary on unit production. On the other hand overhead cost is the summation of all variable cost.
When fixed cost treated as relevant cost?
Fixed cost become relevent cost when a particular decision affects the fixed cost of production. For Example: Before Decision fixed cost $100 After Decision Fixed Cost $120 so in this case fixed cost also becomes relevent for decision making.
Why are historical costs irrelevant?
Historical costs are irrelevant because historical costs are sunk cost and no body can change any decision made in past so anything which can not be change due to underlying decision then that cost is irrelevant cost.
Variable costs are irrelevant whenever they do not differ among the alternatives at hand. do you agree?
Any cost whether variable cost or fixed cost is irrelevant if not different between alternatives at hand.
What is the difference between overhead cost and fixed cost?
Fixed cost is a cost that does not typically vary on unit production. On the other hand overhead cost is the summation of all variable cost.
What is the distinction between relevant cost and irrelevant cost?
Relevant cost is that cost which is necessary for the underlying decision in decision making process while irrelevant cost is not necessary to be decision to be made.
When fixed cost treated as relevant cost?
Fixed cost become relevent cost when a particular decision affects the fixed cost of production. For Example: Before Decision fixed cost $100 After Decision Fixed Cost $120 so in this case fixed cost also becomes relevent for decision making.
Why are historical costs irrelevant?
Historical costs are irrelevant because historical costs are sunk cost and no body can change any decision made in past so anything which can not be change due to underlying decision then that cost is irrelevant cost.
Is capital a fixed cost?
capital is a fixed cost
How will you calculate cost of fixed assets?
Cost of fixed assets includes the cost of asset as well as all costs which are incurred to bring asset to working condition like carriage and installation cost as well.
Food cost fixed or variable?
The cost of all food is variable, depending on supply and demand.
What is all the alternatives to opportunity cost?
relevant cost may include fixed avoidable costs
Select a cost in your industry that is a fixed cost and why is it considered to be a fixed cost?
rental
When is fixed cost relevant in decision making?
When there will be change in fixed cost of business then at that time fixed cost will be relevant cost For Example if acquiring new machinery will reduce the amount of fixed expense in that case fixed cost is also relevant.
What is the difference between relevant cost and irrelevant cost?
Relevant cost is that cost which is required for the specific decision making process or the cost which will be change due to specific decision while irrelevant cost has no concern with decision making or any specific decision.
