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Unformatted text preview: What is a relevant cost? Relevant cost is a cost system that is crucial to a companies’ management decision and can change depending on the dynamics surrounding circumstance to be either crucial or have no effect. These costs to a company can be operating decision specific and important to one specified situation or item as an alternative route. These expenses are normally costs that important to cash flows that can result from a factor or results of those alternatives. Relevant costs are costs that can possibly be prevented based on the steps followed in the specified decision making process. These costs can affect the company’s profits and expectations if changes are made negatively. Whether this relevant cost is deemed irrelevant, the effect is still important to the company due to the cost consideration the item, situation or product and the effect if changed. In order for management to determine if there is a product or item within their company is relevant or not, the product set to be replaced within a...
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This note was uploaded on 01/23/2011 for the course BUS 103 taught by Professor Obiaku during the Spring '08 term at Community College of Allegheny County.
- Spring '08