When an essential information for calculation of income statement is missing, then the costs that can be considered for this purpose is called _____________?
Correct answer: D. relevant costs
- A. expected cost
- B. expected revenues
- C. irrelevant costs
- D. relevant costs
Explanation
Relevant costs are future costs that differ between alternatives and are therefore useful in decision-making when preparing income estimates. Expected costs may be forecasts, but they are not necessarily decision-relevant.
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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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