What Is an Avoidable Cost?

Avoidable costs are a symmetry of "unavoidable costs." Whether it occurs in connection with a particular alternative depends entirely on whether the option is a cost adopted by the decision maker. Such as the rent of processing equipment that needs to be rented in order to increase the production of a certain product, and the depreciation of fixed assets that needs to be increased for self-made parts. As an avoidable cost, although it has a certain degree of influence on the realization of the business objectives of the enterprise, it is not absolutely necessary. Whether it occurs and the specific amount depends on the actual choice of the business operator. Avoidable costs can be fixed costs (such as the rent mentioned above) or variable costs. For example, when a part decides to abandon outsourcing and choose to make its own, the direct material cost and direct labor cost required to manufacture the part. ^[1]