Fixed Costs That Exist Even After a Product Is Dropped

question 173

True/False

Fixed costs that exist even after a product is dropped are called avoidable fixed costs.

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Definitions:

Capital Asset

Long-term property or investment held by a business or individual, intended for use or investment purposes rather than for sale.

Fair Value Increments

Adjustments made to the book value of assets and liabilities to reflect their current market value during acquisition accounting.

Depreciable Assets

Assets whose cost is allocated over their useful lives through depreciation, typically tangible assets like machinery, buildings, and equipment.

Amortization

The process of gradually writing off the initial cost of an intangible asset over its useful life.