Fixed Costs Are Those Costs That Do Not Change as the Level

question 20

Essay

Fixed costs are those costs that do not change as the level of activity increases or decreases.However, fixed costs may be classified as discretionary or committed.
Required:
a.Explain the differences in these classifications and give an example of each.
b.Discuss why managers should consider the impact of these costs in the decision-making process in times of falling profits.

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Definitions:

Team Results

The collective outcomes or achievements of a group working together towards common goals.

Team Members

Individuals who are part of a group collaborating towards a common goal or objective, each contributing with their unique skills and expertise.

Team Success

The achievement of desired results or objectives by a group working collaboratively, often measured by project completion, efficiency, or cohesion.

Synergy

The creation of a whole greater than the sum of its individual parts.