Relevant cost – meaning.

Relevant cost - meaning.
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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.

Author: amidu edson

I am certified accountant with more than 5 years of teaching experience. Currently am teaching auditing and assurance, management accounting and financial accounting for student preparing for professional exams such as ACCA and CPA.

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