What is relevant costing?

Answer:

Answer

Relevant costing is used in management accounting when deciding between two options in the future.

All sunk costs are ignored as they are common to both options.

All non-cash items such as depreciation are ignored as they are not part of future cash flows.

Opportunity costs are included - These are costs you incurr as a result of not persuing the alternative, these come in the form of lost profits or savings on costs you would have otherwise incurred.

First answer by ID3643530631. Last edit by Nagarajudondapati. Contributor trust: 2 [recommend contributor recommended]. Question popularity: 15 [recommend question].