Please explain the concepts of relevant costs and incremental costs and how do they relate? Provide examples.© BrainMass Inc. brainmass.com October 10, 2019, 7:42 am ad1c9bdddf
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Problem: Please explain the concepts of relevant costs and incremental costs and how do they relate? Provide examples.
When organizations or businesses need to make an important decision such as investing in fixed assets or other purchasing decisions, the decision-maker needs to support his decisions by using relevant costs. Relevant costs are the differences in costs between two or more business options that would greatly have an impact on the decision. These costs vary, can be controlled and they can also be avoided since they can only be incurred if the business decides to take on a certain option. Examples of relevant costs are the historical costs, those ...
* relevant costs explained and examples given
* incremental costs explained and examples given