Accounting Dictionary - Letter R

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Relevant costs
are expected future cash flows that result from a specific decision. Relevant costs are important for managerial decision-making. Incremental (differential) costs are relevant costs as they differ from alternatives whereas sunk costs are not relevant costs for decision-making purposes as they are historical costs (i.e., they cannot be changed by the decision as historical transactions cannot be reversed).
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