Q393
During planning period, a marginal cost for raising a new debt is classified as
A.
debt cost
B.
relevant cost
AnswerC.
borrowing cost
D.
embedded cost
Answer: Option B
Solution
Answer: Option B
Solution:
During planning period, a marginal cost for raising a new debt is classified as relevant cost. Relevant cost is a managerial accounting term that describes avoidable costs that are incurred when making business decisions. The concept of relevant cost is used to eliminate unnecessary data that could complicate the decision-making process.