What Is Characteristic of Discretionary Fixed Costs

question 105

Multiple Choice

What is characteristic of discretionary fixed costs?

• A) They cannot be easily changed.
• B) They increase as output increases.
• C) They often involve a long-term contract.
• D) They can be easily changed by management.

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Definitions:

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, representing the ownership interest of the business owners.

Cash Withdrawals

The act of taking money out of an account, decreasing the account balance.

Assets

Resources owned or controlled by a company or individual with the expectation that they will provide future benefit.

Accounting Equation

A fundamental financial principle representing the relationship between a company's assets, liabilities, and shareholder's equity: Assets = Liabilities + Equity.