ECONOMICS

Detailed explanation-1: -Definition: Relevant cost, also called differential cost, is a management accounting term decsribing costs that pertain to a particular decision. Relevant costs will vary based on the context of the decision, such as an omnichannel business analysis by a multi-platform retailer.

Detailed explanation-2: -The relevant costs are future cash flows, incremental costs, opportunity costs, and avoidable costs.

Detailed explanation-3: -What is a Relevant Cost? 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. The relevant cost concept is extremely useful for eliminating extraneous information from a particular decision-making process.

Detailed explanation-4: -Costs are broadly classified into four types: fixed cost, variable cost, direct cost, and indirect cost.