Irrelevant Cost

DEFINITION of 'Irrelevant Cost'

A managerial accounting term that represents a cost, either positive or negative, that does not relate to a situation requiring management's decision.

BREAKING DOWN 'Irrelevant Cost'

As with relevant costs, irrelevant costs may be irrelevant for some situations but relevant for others. Examples of irrelevant costs are fixed overheads, notional costs, sunk costs and book values.

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