Discretionary Fixed Costs

question 31

Multiple Choice

Discretionary fixed costs

• A)have a planning horizon that covers many years.
• B)may be reduced for short periods of time with minimal damage to the long-run goals of the organisation.
• C)cannot be reduced for even short periods of time without resulting in significant damage to the long-run goals of the organization.
• D)are most effectively controlled through the effective utilization of facilities and organization.

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Definitions:

Opportunity Cost

The consequence of forfeiting potential gains in other options by deciding on one.

Professional Team

A group of individuals with specialized skills and expertise working together in a coordinated manner towards common professional goals.

Opportunity Cost

The cost of missing out on potential benefits from other alternatives when making a choice.

Forgone Current Income

The income an individual or entity could have earned but chose to forego for pursuing an alternative.