Differential Cost Definition

Differential Cost Definition:

Any cost that differs between alternatives in a decision-making situation. In managerial accounting, this term is synonymous with avoidable cost and relevant cost. Also see Incremental cost.

Example: Cost of first alternative = 5000; Cost of second alternative = 4000; Differential cost = 5000 – 4000 = 1000

Other Related Accounting Articles:

Recommended Books !



Or

Download E accounting book in MS-word format for just 20 $ - Click here to Download


Leave a Reply

Your email address will not be published. Required fields are marked *