In a decision as to whether or not to drop a product,fixed costs that have been allocated to that product are always relevant.

Name: In a decision as to whether or not to drop a product,fixed costs that have been allocated to that product are always relevant.
Brand: Quizplus
Rating: 4.7 (46 reviews)

Question

Quizplus · Accepted Answer

Fixed costs are not relevant in the decision to drop a product because they do not change with the level of production or whether a product is discontinued. Only variable costs and avoidable fixed costs are relevant in such decisions.

In a Decision as to Whether or Not to Drop