Escapable and Unavoidable Costs:
Answer (1)
16th Oct, 2021
Escapable costs are costs that can be reduced due to a contraction in the activities of a business enterprise. It is the net effect on costs that is important, not just the costs directly avoidable by the contraction. Unavoidable costs, such as labor charges, power, etc., are necessary to run the organization.
Escapable costs are different from controllable and discretionary costs. The latter are like chopping off the additional fat and are not directly associated with a special curtailment decision.
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