Asked by Katie Creager on May 05, 2024
Verified
A cost that can be avoided by choosing one alternative over another is relevant for decision purposes.
Decision
The process of making choices among alternative courses of action.
- Master the identification of costs that are pertinent and impertinent to decision-making scenarios.
- Classify costs into those that can be circumvented and those that are permanently lost.
Verified Answer
TR
Talvi RaamatMay 12, 2024
Final Answer :
True
Explanation :
A relevant cost is any cost that is affected by a decision and is different between the alternatives being considered. If a cost can be avoided by choosing one alternative over another, then it is a relevant cost and must be taken into account when making a decision.
Learning Objectives
- Master the identification of costs that are pertinent and impertinent to decision-making scenarios.
- Classify costs into those that can be circumvented and those that are permanently lost.