The costs such as book value of old machines are $25000 can be a classified as an example of ____________?
Correct answer: C. irrelevant
- A. salvages
- B. relevant
- C. irrelevant
- D. depreciated cost
Explanation
The book value of an old machine has already been incurred and cannot be changed by a current decision, so it is irrelevant. Its amount may be recorded in the accounts, but it is not relevant to choosing between alternatives.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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