What is the difference between Avoidable Cost and Unavoidable Cost? - ProProfs Discuss
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What is the difference between Avoidable Cost and Unavoidable Cost?

Asked by Demi , Last updated: Feb 26, 2022

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2 Answers

B. Wright

B. Wright

Always excited to learn and talk about new topics

B. Wright
B. Wright, Analyst, MCA, Boston

Answered Dec 02, 2020

There are two types of the cost related to business, which is an avoidable and unavoidable cost. An avoidable cost is a cost that can be avoided because it is not necessary to have. Another example of an avoidable cost is if the activity no longer occurs, it is no longer necessary to purchase it.
Unavoidable costs differ from avoidable costs because they are necessary. Even if an activity does not occur, it would still be required to pay this cost. An example of this is a business promoting itself. Promotion is a necessary part of a business being successful, and it is not a cost that the business can avoid.

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L. Sevigny

L. Sevigny

L. Sevigny
L. Sevigny, Doctor, Las Vegas

Answered Jul 07, 2020

An avoidable cost is the type of cost that you do not need to pay for if in case the activity for it does not occur. For example, there is one activity that did not really happen; this means that you do not have to pay for it anymore.

For example, the expenses that you would need to pay for supply can be considered to be avoidable, especially if there are some supplies that you do not need to get. When you say unavoidable costs, this is the type of cost that you do still need to pay for, even if the activity has not taken place.

For example, there may be a product that is not performing well, and it will be dropped, but because supplies and the production for the product have already taken place, the costs for the product can be considered as unavoidable.

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