Unavoidable expenses are costs that will not be eliminated if a department is closed. Unavoidable expenses are also called inescapable expenses for this very reason. They will remain no matter what the company does.
Explanation :
In a down economy, management is often faced with the decision of cutting branches, departments, and even products. In order to save the company money, managers tend to look at the departments or products that are losing money or not turning a profit. A lot of times shutting down departments simply because they are losing money is not always a good idea.
In a nutshell :
- Unavoidable expenses are costs that will not be eliminated if a department is closed.
- Unavoidable expenses are also called inescapable expenses for this very reason.
- They will remain no matter what the company does.
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