Relevant costs are always
A) fixed costs.
B) variable costs.
C) avoidable costs.
D) sunk costs.

Question

Quizplus · Accepted Answer

Relevant costs are costs that are specifically tied to a decision and can be avoided if the decision is not taken. These are also known as avoidable costs. Fixed costs (A) and variable costs (B) may or may not be relevant depending on the decision being made. Sunk costs (D) are costs that have already been incurred and cannot be changed, and therefore are not relevant to future decisions.

Relevant Costs Are Always