Which of the following statements is true of discretionary costs?
A) They arise from day-to-day operational decisions.
B) They include conversion cost, direct material costs.
C) They have measurable cause-and-effect relationship between output and resources used.
D) They have high level of uncertainty.

Question

Quizplus · Accepted Answer

Discretionary costs are those that are not directly related to production or operation and are optional or controllable in nature. Examples include advertising, research and development, employee training, and charitable donations. These costs are subject to change based on management decisions and can have a high level of uncertainty, making them difficult to predict.

Which of the Following Statements Is True of Discretionary Costs