The cost is known as: Discretionary cost
What is Discretionary cost?
Discretionary cost is a cost that can be reduced or eliminated in the short term without having an immediate impact on the short-term profitability of a business.
Discretionary cost are cost that a business or household can survive without, if necessary. They are often defined as nonessential spending.
Examples of discretionary costs include:
- Advertising
- Maintenance
- Training
Hence, a cost that results from management's decision to spend a particular amount of money for some purpose is called Discretionary cost.
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