cost concept and cost classification

Question 1

write about relevant cost.

Answer 1

Relevant cost refers to costs that will be directly affected by a specific decision, meaning they are future costs that differ between alternatives and should be considered when making decisions.

Question 2

write briefly about committed fixed cost

Answer 2

Committed Fixed Cost refers to long-term expenses that a company has already committed to, and it can’t easily change or avoid. These costs are typically related to things like long-term contracts, leases, or salaried employees, and they remain the same regardless of production levels.
In short, these are “non-negotiable” costs that a business must pay, even if it doesn’t produce anything.