A company should ________ when making a short-term special decision.
A)focus on qualitative factors only
B)focus on quantitative factors only
C)separate variable costs from fixed costs
D)use a traditional direct costing approach

Question

Quizplus · Accepted Answer

Separating variable costs from fixed costs is crucial in short-term special decision-making because it helps in understanding how costs behave with changes in production or sales volume, which is essential for making informed decisions. Fixed costs do not change with the level of output in the short term, whereas variable costs do. This distinction is important for decisions such as pricing, outsourcing, and identifying profitability levels for different products or services.

A Company Should ________ When Making a Short-Term Special Decision