Suppose you are trying to decide whether to drive or take the train to Portland to attend a concert. You have ample cash to do either, but you don’t want to waste money needlessly. Is the cost of the train ticket relevant in this decision? In other words, should the cost of the train ticket affect the decision of whether you drive or take the train to Portland?
- Yes, the cost of the train ticket is relevant.
- No, the cost of the train ticket is not relevant.
Choose your answer (yes or no) also explain why you chose your answer.
Relevant CostThere are different costs that are considered when the company has to make certaindecisions. All the costs that helps in making the decisions are known as Relevant costs asthese are…