CIMA BA2 · Chapter 11 · Question 11 of 12
Which of the following is a COMMITTED cost, and therefore not relevant to a new decision?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Lease rentals payable under a non-cancellable lease already signed
Explanation
A committed cost is a future cash outflow that will be incurred whatever decision is taken, because of an existing obligation. The lease rentals will be paid anyway, so they are not relevant. The specific materials, extra overtime and lost contribution all arise only because of the decision.
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