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What else can I help you with?
Are marginal costs relevant costs?
If marginal costs are relevant for specific situation or specific decision making scenario then marginal costs are relevant costs otherwise marginal costs can be irrelevant.
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.
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.
Variable costs are relevant and fixed costs are irrelevant?
Generally variable costs are relevant costs but if due to any decision fixed costs are also going to affected then fixed costs are also relevant costs.
Why are fixed costs are irrelevant in profit maximization decision?
Fixed costs are considered irrelevant in profit maximization decisions because they do not change with the level of production or sales; they remain constant regardless of output. Profit maximization focuses on marginal costs and marginal revenues, which directly impact decision-making. Since fixed costs do not influence the marginal analysis, they do not affect the optimal output level. Thus, decisions should be based on variable costs and revenues that fluctuate with production levels.
What costs are always irrelevant in decision making?
In decision-making, sunk costs are always irrelevant as they represent past expenditures that cannot be recovered and should not influence future choices. Additionally, irrelevant costs, such as future costs that do not differ between alternatives, also do not impact the decision at hand. Focusing on relevant costs—those that will change as a result of the decision—ensures a more effective evaluation of options.
Are marginal costs relevant costs?
If marginal costs are relevant for specific situation or specific decision making scenario then marginal costs are relevant costs otherwise marginal costs can be irrelevant.
How does relevant evidence and material evidence differ?
Relevant means that the evidence provided goes toward establishing whether a person met one or more of the required elements of a crime. Irrelevant means it does no have anything to do with proving any of those elements. Often an attorney will try to get irrelevant evidence introduced for other factors, such as showing prior crimes, or getting th sympathy of the jury, which may or may not be applicable to what is being tried. * Differential/ marginal/variable/incremental costs are always relevant * Cash costs and future costs are always relevant * Past costs or sunk costs are always irrelevant * Fixed costs are always irrelevant unless they are incremental
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.
Why depreciation on an existing asset is always irrelevant?
Depreciation is an invisible, non-cash cost and it is irrelevant when calculating the cash flow of the company which is the true indicator of whether the company is making a profit or not. Depreciation is also irrelevant because it is not truly realized until the asset is resold or scrapped at the end of its life. Recording it every year is consistent with the theory of conservatism when writing off costs. Depriciation is also irrelevant for the existing assets becoz it is fixed and fixed costs are always irrelevant unless they are incremental
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.
Which costs more Audi or Porsche?
Porsche. However, there are no comparable models, so the question is somewhat irrelevant.
Variable costs are relevant and fixed costs are irrelevant?
Generally variable costs are relevant costs but if due to any decision fixed costs are also going to affected then fixed costs are also relevant costs.
Why are fixed costs are irrelevant in profit maximization decision?
Fixed costs are considered irrelevant in profit maximization decisions because they do not change with the level of production or sales; they remain constant regardless of output. Profit maximization focuses on marginal costs and marginal revenues, which directly impact decision-making. Since fixed costs do not influence the marginal analysis, they do not affect the optimal output level. Thus, decisions should be based on variable costs and revenues that fluctuate with production levels.
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.
What are the diferences between sunk costs historical costs and budget costs?
Sunk costs refer to expenses that have already been incurred and cannot be recovered, regardless of future outcomes. Historical costs represent the original costs of an asset recorded on the balance sheet, reflecting what was paid at the time of acquisition. Budget costs, on the other hand, are projected expenses created as part of a financial plan for upcoming periods and guide future spending decisions. While sunk and historical costs are retrospective, budget costs are forward-looking and used for financial planning.
Why is it important to use current costs rather historical?
INFLATION!
