What Is an Avoided Cost?

Cost avoidance is cost avoidance. For example, when designing a product, remove unnecessary functions of the product and replace the old material with a new one.

Cost avoidance

Another example is the product

The idea of cost avoidance lies in

Cost saving is an effort to reduce unnecessary costs at the job site and improve working methods to save costs that would otherwise occur. It is expressed as two implementation forms of "cost maintenance" and "cost improvement", which is a primary form of cost reduction. form. The basic idea of cost avoidance is based on prevention, and tapping the potential of cost reduction from the source of management is an advanced form of cost reduction. Cost avoidance such as "zero-based budgeting" is limited to the idea of single value management. The "cost design" in the United States and the "cost planning" model in Japan have taken a unique step in cost avoidance. The essence of modern cost avoidance is "cost innovation." Furthermore, a generalized cost control idea of cost control and cost avoidance based on the product life cycle business process, which integrates engineering methods, organizational measures, and diversified means of accounting measurement, was formed.