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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.
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.
Are sunk costs ever relevant for decision-making purposes?
NO, its cost which was wasted in past we can not recover it so it is not relevant for decision making.
Is fixed cost the same as sunk cost?
Sunk cost is that cost which is incurred in past so in decision making process any cost which is incurred in past has no effect on future events and due to which all fixed cost which are also incurred in past has no effect in future that's why it is not relevent for decision making process, so for decsion making point of view yes fixed cost is sunk cost.
What are the differences between relevant cost and irrelevant cost?
In decision making process those cost which are effected from the decision under consideration those costs are called relevent costs and those costs which have no impact on decision making of specific project are called irrelevent costs.
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.
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.
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.
Are sunk costs ever relevant for decision-making purposes?
NO, its cost which was wasted in past we can not recover it so it is not relevant for decision making.
Is variable cost a relevant cost?
No. If a variable cost does not differ between alternatives than it is irrelevant.
Is fixed cost the same as sunk cost?
Sunk cost is that cost which is incurred in past so in decision making process any cost which is incurred in past has no effect on future events and due to which all fixed cost which are also incurred in past has no effect in future that's why it is not relevent for decision making process, so for decsion making point of view yes fixed cost is sunk cost.
Are all future cost are relevant in decision making?
Future costs are relevant in decision making if the decision will affect their amounts. For example, suppose you're trying to decide whether to drive to work or take the bus. Relevant future costs information includes (1) the cost of gasoline and tolls needed to drive to and from work and (2) the cost of bus fare because both of these costs depend on your decision. However, future costs that won't change - such next month's rent on your apartment - are not relevant because, regardless of your decision, they will not change. Note that past costs are never relevant in decision making.
All future costs are relevant in decision making?
Future costs are relevant in decision making if the decision will affect their amounts. For example, suppose you're trying to decide whether to drive to work or take the bus. Relevant future costs information includes (1) the cost of gasoline and tolls needed to drive to and from work and (2) the cost of bus fare because both of these costs depend on your decision. However, future costs that won't change - such next month's rent on your apartment - are not relevant because, regardless of your decision, they will not change. Note that past costs are never relevant in decision making.
Is fixed cost relevant in determining price of a product?
The fixed cost is relevant in determining price of a product. This is a cost that is associated with the product and will contribute to the total production cost of a product.
What are the differences between relevant cost and irrelevant cost?
In decision making process those cost which are effected from the decision under consideration those costs are called relevent costs and those costs which have no impact on decision making of specific project are called irrelevent costs.
Why a cost accumulation system is required for generating relevant cost information for decision making?
cost accumulation is the collecting and gathering of all cost and become collected
Explain the concept of the relevant range?
The relevant range refers to the level of activity or volume within which fixed and variable cost behavior remains consistent. It is the range of production or sales levels where the assumptions about cost behavior, such as fixed costs remaining constant and variable costs per unit being stable, are valid. Outside this range, costs may change, potentially leading to different cost structures and affecting decision-making. Understanding the relevant range is crucial for budgeting, forecasting, and cost management.
