If a company is making a decision that involves discontinuing a product, the "avoidable" costs associated with that product would be relevant costs in the decision.

Question

Quizplus · Accepted Answer

Avoidable costs are costs that can be eliminated if a particular decision is made. In the case of discontinuing a product, avoidable costs would be costs that would no longer be incurred if the product is discontinued. Since these costs can be directly linked to the decision, they are relevant costs and should be considered in the decision-making process.

If a Company Is Making a Decision That Involves Discontinuing