Fixed Costs That Continue to Exist Even After a Product

question 118

Multiple Choice

Fixed costs that continue to exist even after a product line is dropped are called

• A) avoidable fixed costs.
• B) unavoidable fixed costs.
• C) variable fixed costs.
• D) relevant fixed costs.

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Definitions:

Recognition

The process in accounting where certain transactions are recorded in the financial statements of a reporting period.

Discount

A reduction applied to the nominal price or face value of something for promotional purposes, or to reflect current market values.

Forward Contract

A financial derivative contract obligating the buyer to purchase an asset, or the seller to sell an asset, at a predetermined future date and price.

Exchange Rates

The rate at which one currency can be exchanged for another.