Managers can reduce capacity-based fixed costs by measuring and managing ________.
A) unused capacity
B) variable costs
C) engineered costs
D) discretionary costs

Question

Quizplus · Accepted Answer

Unused capacity refers to the amount of capacity that is not being utilized in the production process. By measuring and managing unused capacity, managers can identify opportunities to reduce capacity-based fixed costs, such as by decreasing production levels or outsourcing some tasks. This can help minimize waste and improve overall efficiency, leading to cost savings for the company. Variable costs, engineered costs, and discretionary costs may also be important factors for managers to consider, but they do not directly relate to reducing capacity-based fixed costs.

Managers Can Reduce Capacity-Based Fixed Costs by Measuring and Managing