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N. K. Gupta posted an Question
April 06, 2021 • 18:48 pm 30 points
  • UGC NET
  • Commerce

Relevant cost, imputed cost, sunk cost and avoidable cost define simple

relevant cost, imputed cost, sunk cost and avoidable cost define simple

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    Gaurav soin best-answer

    Relevant cost is a managerial accounting term that describes avoidable costs that are incurred only when making specific business decisions. The concept of relevant cost is used to eliminate unnecessary data that could complicate the decision-making process. an implicit cost, also called an imputed cost, implied cost, or notional cost, is the opportunity cost equal to what a firm must give up in order to use a factor of production for which it already owns and thus does not pay rent. It is the opposite of an explicit cost, which is borne directly. a sunk cost is a cost that has already been incurred and cannot be recovered. Sunk costs are contrasted with prospective costs, which are future costs that may be avoided if action is taken. An avoidable cost is an expense that will not be incurred if a particular activity is not performed. Avoidable costs refer primarily to variable costs that can be removed from a business operation, unlike most fixed costs, which must be paid regardless of the activity level of a company.

  • Rucha rajesh shingvekar

    A sunk cost refers to a cost that has already occurred and has no potential for recovery in the future. For example, your rent, marketing campaign expenses or money spent on new equipment can be considered sunk costs. An avoidable cost is a cost that is not incurred if the activity is not performed. Examples include labor cost, packaging, or materials. These costs are often identified as variable costs, which vary based on production

  • Rucha rajesh shingvekar best-answer

    Relevant costs' can be defined as any cost relevant to a decision. A matter is relevant if there is a change in cash flow that is caused by the decision. The change in cash flow can be: additional amounts that must be paid. a decrease in amounts that must be paid. Imputed cost is the cost incurred during the period when an asset is employed for a particular use, rather than redirecting the asset to a different use. This amount is the incremental difference between the two options. For example, a teacher decides to go back to school to earn a master's degree

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