If cost data will be used for decision-making, it is important to consider what costs are under the decision maker's direct control.
Understanding your costs is crucial for informed business selections. It enables you to decide the profitability of your operations and how to set costs. but proper costing is complex, and lots of businesses aren't doing a terrific job.
Relevant cost is a managerial accounting time period that describes avoidable costs which are incurred handiest when making specific business choices. The idea of relevant cost is used to take away needless facts that could complicate the choice-making technique.
Will meet the standards for relevancy, a cost must have two standards that encompass they affect the future and they differ amongst options. Different groups of theorists asserted that the relevant expenses are applicable to the decision. Expenses are applicable, in the event that they direct the executive closer to the decision.
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