Welcome to the Financial Times Lexicon

Browse thousands of words and phrases selected by Financial Times editors and suggest new terms for the glossary.

 

Term of the day

avoidable cost
That part of the cost of any output that could be saved by not producing it. Some costs are clearly not avoidable, for example capital costs, therefore, avoidable costs are often variable costs. For example, it is the cost that can be saved by dropping a particular product line or salaries paid to employees in a particular department. All costs are avoidable, except ‘sunk costs’ and costs that will continue regardless of the decision.