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Explain The Meaning Of Shut Down Costs? |
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Answer» Those costs which CONTINUE to be incurred even when a PLANT is temporarily shut-down, e.g. rent, rates, DEPRECIATION, etc. these costs cannot be eliminated with the closure of the plant. In other words, all FIXED costs, which cannot be AVOIDED during the temporary closure of a plant, will be known as shut down costs. Those costs which continue to be incurred even when a plant is temporarily shut-down, e.g. rent, rates, depreciation, etc. these costs cannot be eliminated with the closure of the plant. In other words, all fixed costs, which cannot be avoided during the temporary closure of a plant, will be known as shut down costs. |
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