Future Costs

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August 31, 2024 4 min read Definitions

Cost Prediction: Estimation of Future Cost Levels

Mathematics Statistics Economics Finance Cost Prediction Future Costs Linear Regression Statistical Techniques Financial Forecasting

A comprehensive guide to Cost Prediction, the estimation of future cost levels based on historical cost behaviour using statistical techniques such as linear regression.

August 31, 2024 4 min read Definitions

Relevant Cost: An Essential Concept in Decision Making

Economics Finance Management Relevant Cost Decision Making Future Costs Differential Analysis Sunk Costs

Relevant cost refers to an expected future cost that varies with alternative courses of action. Understanding relevant costs is crucial for various business decisions such as special selling-price decisions, product-mix decisions, equipment replacement, outsourcing, and decisions on dropping a product or closing a department.