The relevant fixed costs for a keep or drop decision are the unavoidable fixed costs.

Name: The relevant fixed costs for a keep or drop decision are the unavoidable fixed costs.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Unavoidable fixed costs are not relevant to the decision because they will be incurred regardless of whether the product or segment is kept or dropped. Relevant fixed costs are those that can be avoided if the decision to drop is made.

The Relevant Fixed Costs for a Keep or Drop Decision