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What is an unavoidable cost?

Unavoidable costs are generally more fixed in nature and cannot be eliminated, even if the company takes certain action like discontinuing a product line. Any costs that can be eliminated is referred to as an avoidable cost. A company should try to have avoidable costs as those can be eliminated if the company experiences financial distress.


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  • What is an avoidable cost?

    An avoidable cost is a cost that can be avoided if the company makes a particular decision. For example, if a company allows workers to work from home, but they also have an office, they could decide to shut down the office and save on rent and facility costs. The rent and facility costs are...