Question

Relevant costs and benefits for decision-making. State an example, like in personal life or at work, where you actually needed to consider relevant costs and benefits, and how you distinguish which are relevant and irrelevant costs?

Answer 1

Answer:

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Relevant costs are those costs that change with each decision you make. If you have two choices, and you choose A instead of B, relevant costs are those costs that will be different from those associated with choice B. These are costs that directly affect cash flow, the money coming in and going out of a business.