In the decision to drop a product line, fixed costs are often classified as:
A) Avoidable or sunk
B) Sunk or opportunity
C) Product or period
D) Incremental or avoidable

Question

Quizplus · Accepted Answer

Fixed costs in the context of dropping a product line are often classified as either avoidable or sunk. Avoidable fixed costs are those that can be eliminated if the product line is discontinued, while sunk costs have already been incurred and cannot be recovered.

In the Decision to Drop a Product Line, Fixed Costs