Relevant Costs for Decisions

W. Armand Layne
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W. Armand Layne: University of the West Indies

Chapter Chapter 10 in Cost Accounting, 1984, pp 169-186 from Palgrave Macmillan

Abstract: Abstract The dictionary defines the word ‘relevant’ to mean, ‘bearing upon, connected with, pertinent to, the matter in hand’. The definition clarifies the concept, but what is needed is an operational statement for accounting purposes. Horngren (1977) provides such a statement: ‘For a cost or revenue to be relevant to a particular decision, it must meet two criteria: (i) It must be an expected future cost; and (ii) it must be an element of difference between alternatives.

Keywords: Cash Flow; Fixed Cost; Management Function; Cost Account; Sales Revenue (search for similar items in EconPapers)
Date: 1984
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DOI: 10.1007/978-1-349-17691-5_11

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