Which type of fixed cost (1) tends to be more long-term in nature and (2) can be cut back more easily in bad economic times without doing serious harm to organizational goals and objectives? $\begin{array} { | l | c | c | }
\hline & \text { Long Term in } & \text { Can be Cut Back More Easily In } \
&\text { Nature }&\text { Bad Ficonomic Times }\

\hline 1 & \text { Committed } & \text { Committed } \
\hline 2 & \text { Committed } & \text { Discretionary } \
\hline 3 & \text { Discretionary } & \text { Committed } \
\hline 4 & \text { Discretionary } & \text { Discretionary } \
\hline 5 & \text { Committed } & \text { No difference between committed and discretionary cost } \
\hline
\end{array}$
A)1
B)2
C)3
D)4
E)5

Question

Which type of fixed cost (1) tends to be more long-term in nature and (2) can be cut back more easily in bad economic times without doing serious harm to organizational goals and objectives? $\begin{array} { | l | c | c | } 
\hline & \text { Long Term in } & \text { Can be Cut Back More Easily In } \
&\text { Nature }&\text { Bad Ficonomic Times }\

\hline 1 & \text { Committed } & \text { Committed } \
\hline 2 & \text { Committed } & \text { Discretionary } \
\hline 3 & \text { Discretionary } & \text { Committed } \
\hline 4 & \text { Discretionary } & \text { Discretionary } \
\hline 5 & \text { Committed } & \text { No difference between committed and discretionary cost } \
\hline
\end{array}$
A)1
B)2
C)3
D)4
E)5

Quizplus · Accepted Answer

Type 2 costs tend to be more short-term and flexible in nature than type 1 costs, which are typically more fixed and inflexible. Therefore, in bad economic times, it is often easier to cut back on type 2 costs without seriously compromising organizational goals and objectives. In contrast, type 1 costs are more difficult to reduce without causing significant harm to the organization's operations or long-term viability.

Which Type of Fixed Cost (1) Tends to Be More