The Term "Committed Costs" Refers to Costs That

question 43

Multiple Choice

The term "committed costs" refers to costs that

• A)management decides to incur in the current period to enable the company to achieve objectives other than the filling of orders placed by customers.
• B)are likely to respond to the amount of attention devoted to them by a specified manager.
• C)are governed mainly by past decisions that established the present levels of operating and organizational capacity and that only change slowly in response to small changes in capacity.
• D)fluctuate in total in response to small changes in the rate of utilization of capacity.

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Definitions:

Disaffirm

The legal right of a party to reject or annul a contract or agreement, often associated with contracts entered into by minors.

Power of Avoidance

The legal ability to nullify or cancel a contractual agreement or transaction under certain conditions.

Disaffirmance

The legal right of a party to renounce or revoke a contract or agreement, particularly relevant in cases involving minors or instances of fraud.

Ratify

To formally approve or confirm an agreement or act, making it officially valid.