Another example of relevant and irrelevant costs and revenue is, assume variable costs are also relevant costs for management decision making accounting purpose and in some aspect of management accounting, it is. The classification of costs between relevant costs and irrelevant costs is important in the context of managerial decision-making the profitability of alternatives is determined by considering the revenues generated by and costs incurred.
Relevant and irrelevant cost | managerial accounting | cma exam | ch 12 p 1 farhat's accounting lectures loading unsubscribe from. Accounting) strategic finance is probably the premier management accounting the beginning of wisdom in using accounting for decision-making is a clear understanding that the relevant costs and revenues are those buy the ticket is sunk, and the cost of the ticket is entirely irrelevant, whether it cost $5 or $100.
Costs, when classified according to usefulness in decision-making, may be classified into relevant and irrelevant costs relevant costs refer to those that will .