avoidable costs

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Costs that are not incurred if a particular course of action is taken or an alternative decision is made. For example, if a specific product is not produced, material and labour costs may not be incurred. In this instance material and labour costs are avoidable costs. Variable costs are often avoidable costs, whereas fixed costs, such as business rates, are not avoidable in the short term. See also relevant cost.

Subjects: Economics — Accounting.

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