Fixed Costs That Do NOT Differ Between Two Alternatives Are

question 23

Multiple Choice

Fixed costs that do NOT differ between two alternatives are:

• A) relevant to the decision.
• B) considered opportunity costs.
• C) irrelevant to the decision.
• D) important only if they represent a material dollar amount.

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Definitions:

Opportunity Cost

The cost of an alternative that must be forgone to pursue a certain action, representing the benefits you could have received by taking an alternative action.

Tax Specialist

A professional expert in tax law, regulations, and planning to optimize taxation outcomes for individuals or businesses.

Tax Return

A document filed with state or federal taxing authorities that reports income, expenses, and other pertinent tax information to calculate tax liability.

Short Run

A period in which at least one input, such as plant size, is fixed and cannot be changed by the firm.