What is the difference between Relevant Cost and Irrelevant Cost? - ProProfs Discuss
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What is the difference between Relevant Cost and Irrelevant Cost?

Asked by B. Wright, Last updated: Jul 16, 2024

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G. Horace

G. Horace

G. Horace
G. Horace, Content Developer, Chicago

Answered Jul 04, 2019

Relevant cost is a term that is found in accounting. There are other names for relevant cost, including differential cost and avoidable cost. A relevant price is one in which the other types of expenses are different from this one. There are specific criteria to be considered a relevant cost. These include the future, cash flow, and incremental. Irrelevant prices are those that the accountant accidentally uses when calculating the costs and analyzing the data.

Relevant cost is a term that is found in accounting. There are other names for relevant cost,
These costs can also be categorized because they could be sunk costs, notional or non-cash costs, and committed costs. The most significant difference between the relevant cost and irrelevant costs is that the accountant wants to use the relevant costs and to stay away from the irrelevant costs.

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