Avoided Cost Calculator

✖Assumed Repair Cost is an estimated or projected expense associated with repairing or restoring an asset, equipment, or property.ⓘ Assumed Repair Cost [ARC]			+10% -10%
✖Production Losses refer to disruptions or reductions in the output of goods or services caused by various factors, resulting in a decrease in productivity or efficiency.ⓘ Production Losses [PL]			+10% -10%
✖Preventative Maintenance Cost refers to the expenses associated with planned and proactive maintenance activities aimed at preventing equipment failures.ⓘ Preventative Maintenance Cost [PMCT]			+10% -10%

✖Avoided Costs refer to expenses or expenditures that a company can prevent or eliminate by taking specific actions.ⓘ Avoided Cost [ACS]

⎘ Copy

👎

Formula

✖

Avoided Cost

Formula

`"ACS" = "ARC"+"PL"-"PMCT"`

Example

`"865"="980"+"470"-"585"`

Calculator

LaTeX

Reset

👍

Avoided Cost Solution

STEP 0: Pre-Calculation Summary

Formula Used

Avoided Costs = Assumed Repair Cost+Production Losses-Preventative Maintenance Cost
ACS = ARC+PL-PMCT
This formula uses 4 Variables

Variables Used

Avoided Costs - Avoided Costs refer to expenses or expenditures that a company can prevent or eliminate by taking specific actions.
Assumed Repair Cost - Assumed Repair Cost is an estimated or projected expense associated with repairing or restoring an asset, equipment, or property.
Production Losses - Production Losses refer to disruptions or reductions in the output of goods or services caused by various factors, resulting in a decrease in productivity or efficiency.
Preventative Maintenance Cost - Preventative Maintenance Cost refers to the expenses associated with planned and proactive maintenance activities aimed at preventing equipment failures.

STEP 1: Convert Input(s) to Base Unit

Assumed Repair Cost: 980 --> No Conversion Required
Production Losses: 470 --> No Conversion Required
Preventative Maintenance Cost: 585 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

ACS = ARC+PL-PMCT --> 980+470-585

Evaluating ... ...

ACS = 865

STEP 3: Convert Result to Output's Unit

865 --> No Conversion Required

FINAL ANSWER

865 <-- Avoided Costs

(Calculation completed in 00.004 seconds)

You are here -

Home » Financial » Cost Accounting » Avoided Cost

Credits

Created by Aashna

IGNOU (IGNOU), India

Aashna has created this Calculator and 50+ more calculators!

Verified by Surjojoti Som

Rashtreeya Vidyalaya College of Engineering (RVCE), Bangalore

Surjojoti Som has verified this Calculator and 0 more calculators!

< 25 Cost Accounting Calculators

Material Cost Variance

Go Material Cost Variance = (Standard Quality for Actual Output*Standard Price)-(Actual Quantity*Actual Price)

Labour Cost Variance

Go Labour Cost Variance = (Standard Hours for Actual Output*Standard Rate)-(Actual Hours*Actual Rate)

Revised Standard Quantity

Go Revised Standard Quantity = (Standard Quantity of each Material/Total Standard Quantity)*Total Actual Quantity

Learning Curve

Go Learning Curve = (Time Taken to Produce Initial Quantity*Cumulative Number of Batches)^(-Learning Coefficient)

Labour Efficiency Variance

Go Labour Efficiency Variance = Standard Rate*(Standard Time-Actual Time)*Variance

Time to Receive

Go Time to Receive = Time for Stock Validation+Time to Add Stock to Records+Time to Prep Stock for Storage

Labour Rate Variance

Go Labour Rate Variance = Actual Time*(Standard Rate-Actual Rate)*Variance

Cycle Time

Go Cycle Time = Process Time+Inspection Time+Move Time+Queue Time

Revised Standard Hours of Labours

Go Revised Standard Hours of Labours = (Actual Mix/Standard Mix)*(Standard Hours of Labour)

Material Yield Variance

Go Material Yield Variance = (Actual Unit Usage-Standard Unit Usage)*Standard Cost per Unit

Overall Equipment Effectiveness

Go Overall Equipment Effectiveness = Good Count*Ideal Cycle Time/Planned Production Time

Avoided Cost

Go Avoided Costs = Assumed Repair Cost+Production Losses-Preventative Maintenance Cost

Material Usage Variance

Go Material Usage Variance = Standard Price*(Actual Quantity Units-Standard Quantity)

Labour Mix Variance

Go Labour Mix Variance = Standard Rate*(Reversed Standard Rate-Actual Time)

Material Price Variance

Go Material Price Variance = Actual Quantity*(Standard Price-Actual Price)

Material Quantity

Go Material Quantity = Standard Price*(Standard Quantity-Actual Quantity)

Customer Acquisition Cost

Go Customer Acquisition Cost = Cost of Sales and Marketing/Number of New Customers Acquired

Total Addressable Market

Go Total Addressable Market = Annual Contract Value per Client*Number of Potential Clients

First Pass Yield

Go First Pass Yield = Number of Good Products Finished/Number of Production Orders Started

Average Days Delinquent

Go Average Days Delinquent = Days Sales Outstanding-Best Possible Days Sales Outstanding

Backorder Rate

Go Backorder Rate = (Number of Undeliverable Orders/Total Number of Orders)

Monthly Recurring Revenue

Go Monthly Recurring Revenue = Number of Customers*Average Billed Amount

Sell -Through Rate

Go Sell Through Rate = Number of Units Sold/Number of Units Received

Takt Time

Go Takt Time = Production Available Time/Customer Demand

On-Time Delivery

Go On-Time Delivery = On Time Units/Total Units

Avoided Cost Formula

Avoided Costs = Assumed Repair Cost+Production Losses-Preventative Maintenance Cost
ACS = ARC+PL-PMCT

What is Avoided Cost ?

Avoided Cost represents the savings or benefits realized by avoiding certain expenditures or negative outcomes. Avoided cost refers to the financial savings or benefits resulting from proactive measures or decisions that prevent or reduce the occurrence of undesirable events or expenses. Avoided costs are typically calculated by estimating the expenses or losses that would have occurred in the absence of the action taken. The difference between the actual costs incurred after taking action and the estimated costs without taking action represents the avoided cost. In summary, avoided costs evaluate the positive financial impact of proactive measures or decisions that prevent or mitigate potential expenses or losses. Identifying and quantifying avoided costs can inform decision-making and resource allocation. It helps prioritize investments and initiatives and is an essential consideration in cost-benefit analysis, risk management, and strategic planning for businesses and organizations.

How to Calculate Avoided Cost?

Avoided Cost calculator uses Avoided Costs = Assumed Repair Cost+Production Losses-Preventative Maintenance Cost to calculate the Avoided Costs, Avoided Cost is a term commonly used in economics, finance, and business to describe the expenses or losses that are prevented or mitigated by taking a particular action. Avoided Costs is denoted by ACS symbol.

How to calculate Avoided Cost using this online calculator? To use this online calculator for Avoided Cost, enter Assumed Repair Cost (ARC), Production Losses (PL) & Preventative Maintenance Cost (PMCT) and hit the calculate button. Here is how the Avoided Cost calculation can be explained with given input values -> 865 = 980+470-585.

FAQ

What is Avoided Cost?

Avoided Cost is a term commonly used in economics, finance, and business to describe the expenses or losses that are prevented or mitigated by taking a particular action and is represented as ACS = ARC+PL-PMCT or Avoided Costs = Assumed Repair Cost+Production Losses-Preventative Maintenance Cost. Assumed Repair Cost is an estimated or projected expense associated with repairing or restoring an asset, equipment, or property, Production Losses refer to disruptions or reductions in the output of goods or services caused by various factors, resulting in a decrease in productivity or efficiency & Preventative Maintenance Cost refers to the expenses associated with planned and proactive maintenance activities aimed at preventing equipment failures.

How to calculate Avoided Cost?

Avoided Cost is a term commonly used in economics, finance, and business to describe the expenses or losses that are prevented or mitigated by taking a particular action is calculated using Avoided Costs = Assumed Repair Cost+Production Losses-Preventative Maintenance Cost. To calculate Avoided Cost, you need Assumed Repair Cost (ARC), Production Losses (PL) & Preventative Maintenance Cost (PMCT). With our tool, you need to enter the respective value for Assumed Repair Cost, Production Losses & Preventative Maintenance Cost and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

Home

FREE PDFs

🔍 Search