Irrelevant Cost

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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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Fixed Cost

    A cost that does not change with an increase or decrease in the ...
  2. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. ...
  3. Variable Cost

    A corporate expense that varies with production output. Variable ...
  4. Managerial Accounting

    The process of identifying, measuring, analyzing, interpreting, ...
  5. Overhead

    An accounting term that refers to all ongoing business expenses ...
  6. Book Value

    1. The value at which an asset is carried on a balance sheet. ...
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