Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 17

What is the relationship, if any, between the relevant cost analysis method and cost-volume-profit analysis?

Step 1 of 2

Relevant cost analysis: Relevant costs are the costs that differ with choices. The analysis of such relevant costs for decision making of either to choose the option or to go for other option is known as relevant cost analysis.

Cost-volume-profit analysis: This is an analysis relating to the change in profits of the entity due to change in cost of the product and the change in the volume of sales.