The more the cost base is composed of fixed or indirect costs,the more ______ it is for managers to use cost reduction strategies to protect the organization's profitability in response to decreases in demand for products and services.
A) difficult
B) easy
C) simpler
D) straightforward
E) effortless

Question

Quizplus · Accepted Answer

Fixed or indirect costs are not dependent on the level of production or sales, making it difficult for managers to reduce them in response to decreases in demand. This makes it challenging to protect the organization's profitability during such situations.

The More the Cost Base Is Composed of Fixed or Indirect