What are the costs that can be avoided?

As well as the name suggests that the costs that can be avoided are any costs that have been excluded or averted to delay something. The extent of activities included in this economic term is unlimited, because the importance of the deadline is derived from any kind of action that leads to saving money that would be created if this specific suspended activity was carried out. Another way to refer to the costs that can be avoided is to call the escape costs, which still expresses the fact that the costs are the costs that can be prevented.

Example of costs that can be avoided can be seen in the case of a department store, which decided to release its seasonal workers at the beginning of the year. In this case, the avoided costs of the department store have prevented wages that the trade would be obliged to pay to workers and any other related costs. Another example is a company that produces prefabricated houses that stoppedRobu -concrete design of such houses because of the high cost of making houses. The costs that can be avoided here would include money that would be spent on raw materials and work that would be spent on the house.

One of the distinguishing characteristics of the costs that avoids them is the fact that it is within the company's strength or individual to avoid decisions about something. This is unlike other types of costs that may not leave such an escape route. The costs that can be avoided are usually associated with the company drive to embark on measures aimed at saving money through removal of products or services that do not work as expected.

For example, if a specific make -up line produced by a cosmetic company is found under the expectation of the company's management, the production of this particular line may decide to stop for the purposePrivade -related benefits. In this case, the costs associated with the production of the cosmetic line are avoided and also avoid the company's strength. The costs that can be avoided includes items such as raw material costs and marketing and promotion budgets, as well as other cost -to -up -to -up costs.