Archive | Cost Analysis

Difference between Relevant Costs and Irrelevant Costs

The upcoming discussion will update you about the difference between relevant costs and irrelevant costs. In order to exercise cost control, managers must be able to make distinction between relevant costs and irrelevant costs. Costs that are affected by the managerial decisions are known as relevant costs and those costs that are not affected are […]

Meaning and Characteristics of Differential Cost

In this article we will discus about the meaning and characteristics of differential cost. Meaning of Differential Cost: Differential cost is the change in the costs which may take place due to increase or decrease in output change in sales volume, alternate method of production, make or buy decisions, change in product mix etc. So, […]

Top 9 Cost Concepts used in Decision Making

The following points highlight the top nine cost concepts used in decision making. The cost concepts are: 1. Marginal Cost 2. Out of Pocket Costs 3. Differential Costs 4. Sunk Costs 5. Opportunity Cost 6. Imputed Costs 7. Replacement Cost 8. Avoidable Cost and Unavoidable Cost 9. Relevant Cost and Irrelevant Cost. Decision Making: Cost […]

Top 7 Applications of Differential Cost

The following points highlight the top seven practical applications of differential cost. The practical applications are: 1. Determination of the most Profitable Level of Production and Price 2. Acceptance of Offer at a Lower Price or Offering a Quotation at Lower Selling Price in Order to Increase Capacity 3. Accept or Reject Decisions 4. Make […]

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