avoidable cost


avoidable cost
An item of expenditure incurred at the discretion of the management of an organization. In contrast to a *sunk cost, an avoidable cost can be incurred or avoided on the basis of a management decision. For example, potential rental fees for warehousing space can be avoided if management decides not to occupy the warehouse, or the *raw material costs of a manufacturing process can be avoided if management decides not to produce the item in question. Avoidable costs can be Variable or fixed in nature. See also Unavoidable cost and *controllable cost.

Auditor's dictionary. 2014.

Look at other dictionaries:

  • Avoidable Cost — An expense that will not be incurred if a particular activity is not performed. Avoidable cost refers to variable costs that can be avoided, unlike most fixed costs, which are typically unavoidable.While avoidable costs are often viewed as… …   Investment dictionary

  • Устранимые затраты (AVOIDABLE COST, ESCAPABLE COST)  — 1. Постоянно возникающие затраты предприятия, которые можно устранить, прекратив выпуск определенной продукции или выполнение некоторых операций, либо повысив их эффективность. Ср. Неотвратимые затраты ( Unavoidable Cost).  2. Затраты, которых… …   Словарь терминов по управленческому учету

  • avoidable costs — Costs that are not incurred if a particular course of action is taken or an alternative decision is made. For example, if a specific product is not produced, material and labour costs may not be incurred. In this instance material and labour… …   Accounting dictionary

  • avoidable costs — Costs that will not be incurred if a particular course of action is not taken. For example, if a specific product is not produced, certain material and labour costs may be avoided. Variable costs are often avoidable costs, whereas fixed costs,… …   Big dictionary of business and management

  • relevant cost — A *cost that has a bearing on a decision making process or that is affected by a decision making process. See also *avoidable cost, *controllable cost, and *discretionary cost …   Auditor's dictionary

  • sunk cost — An unavoidable item of expenditure incurred because of a past decision. In contrast to an *avoidable cost, a sunk cost cannot be changed by a further decision (without avoiding penalties). For example, an organization that enters a binding… …   Auditor's dictionary

  • unavoidable cost — An expense that is incurred irrespective of the discretion of an organization’s managers. Compare *avoidable cost, *controllable cost, and *sunk cost …   Auditor's dictionary

  • controllable cost — An expense that is incurred at the discretion of an organization’s managers. The performance of individuals is often appraised, in part, in relation to efficient use of controllable costs. Most costs in this category are *variable, but some… …   Auditor's dictionary

  • escapable cost — An alternative term for *avoidable cost …   Auditor's dictionary

  • устранимые затраты — 1. Постоянно возникающие затраты предприятия, которые можно устранить, прекратив выпуск определенной продукции или выполнение некоторых операций, либо повысив их эффективность. Ср. Неотвратимые затраты (Unavoidable Cost). 2. Затраты, которых… …   Справочник технического переводчика


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