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

Exercise 18

Explain why depreciation is a nonrelevant cost.

Step 1 of 2

The profitability of the organization is determined by the balance in the financial statements. There should be a balance between the expenses and the income gained. In order to have a forecast about the performance of the firm relevant and nonrelevant cost are taken in to consideration.