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Concept Introduction:
Relevant Cost: Relevant cost are those expected future cost which are necessary to take decision. For example, in a decision relating to replacement of an old machine, the written down value of exisiting machine is not relevant but its sale price is relevant.
Irrelevant Cost: Cost which are nor relevant for decision making are called irrelvant cost. The following cost are considered to be irrelevant :
1. Historical or Sunk Cost
2. Fixed Expenses which remains unchanged across different alternatives.
Sunk Cost: Sunk cost are the historical cost, which is incurred in past. These cost are not relevant in decision making.
To State:
1. Relevant and irrelevant factors to Jacob’s Dilemma
2. Jacob should do
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Chapter 25 Solutions
MyLab Accounting with Pearson eText -- Access Card -- for Horngren's Accounting, The Financial Chapters (My Accounting Lab)
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
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