Question

_______ is future cost that affects the current management decision

Answer 1

relevant or irrelevant cost

Answer 2

Relevant cost is the future cost which affects the current management decision.

A relevant cost also referred as avoidable cost or differential cost is a cost that differs between alternatives being considered. In order for a cost to be a relevant cost it must follow-

•Future

•Cash Flow

•Incremental

It is often important for businesses to distinguish between relevant and irrelevant costs when analyzing alternatives because erroneously considering irrelevant costs can lead to unsound business takings. Also, ignoring irrelevant data in analysis can save time and effort.