Relevant cost - meaning

Relevant cost – meaning.

Relevant cost are future cash flows arising as a direct consequence of decision. Relevant cost must be:

  • the cost that will occur in the future
  • cost that will result in the cash flow
  • arise as direct consequence of the decision

Sunk cost and committed cost are not relevant cost.

Leave a Comment

Your email address will not be published. Required fields are marked *

%d bloggers like this: