As compared to irrelevant cost, occurrence of relevant costs must be in future. Relevant costs are affected by a new decision. Irrelevant costs have to be incurred irrespective of a new decision. The relevant costs affect the future cash flows, whereas the irrelevant costs do not affect future cash flows.
Decisions made by team of individuals or single person, whether to outsource products or in-source are classified as
Difference that exists between total revenues, can be earned from two different alternatives is termed as differential revenue. Differential revenue is the difference in sales that will be generated by two different courses of action. The concept is commonly used when evaluating which of two (or more) investments to make in a business.
Relevant costs are classified in relevance concepts as expected future costs. A relevant cost is a cost that only relates to a specific management decision, and which will change in the future as a result of that decision.
Financial factors measured in numerical terms, having some monetary value are considered as
Financial factors measured in numerical terms, having some monetary value are considered as quantitative factors. Quantitative factors are numerical outcomes from a decision that can be measured. These factors are commonly included in various financial analyses, which are then used to evaluate a situation.
Forgone contribution of resources, in to revenues because of not using resources, in next best use is classified as
Forgone contribution of resources, in to revenues because of not using resources, in next best use is classified as opportunity cost. Opportunity cost refers to what you have to give up to buy what you want in terms of other goods or services.
Difference of cost, which occurs while considering alternatives can be classified as
Difference of cost, which occurs while considering alternatives can be classified as differential cost. Differential cost is the difference between the cost of two alternative decisions, or of a change in output levels. The concept is used when there are multiple possible options to pursue, and a choice must be made to select one option and drop the others.
Costs such as book value of old machines are $25000 can be a classified as an example of