Describe two potential problems that should be avoided in relevant-cost analysis.
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1. Do not assume all variable costs are relevant and all fixed costs are irrelevant.
2. Do not assume unit cost data directly. It can mislead decision makers because iy may include irrelevant costs and comparisons of unit costs computed at different output levels lead to erroneous conclusions.
2. Do not assume unit cost data directly. It can mislead decision makers because iy may include irrelevant costs and comparisons of unit costs computed at different output levels lead to erroneous conclusions.
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