Q372
As compared to irrelevant cost, occurrence of relevant costs must
A.
have high correlation
B.
be in future
AnswerC.
be in past
D.
be zero correlated
Answer: Option B
Solution
Answer: Option B
Solution:
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.