Unavoidable cost
An unavoidable cost remains under the alternatives being compared over the relevant decision period. It therefore does not affect their incremental financial difference, although the organisation must still fund it. The label is decision-specific: a cost unavoidable this month may be avoidable after a contract expires. Assess the actual commitments, resource redeployment and time horizon rather than treating all fixed costs as permanently unavoidable.
Worked example
A lease payment of $6,000 is payable for the remaining three months whether a product continues or stops. It is unchanged in that short-run comparison.
Common mistake
An irrelevant decision difference is not an unimportant business obligation; unavoidable payments still matter for total cash planning.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | PM | Direct | September 2026–June 2027 |
