A major difference between committed and discretionary fixed costs is that
A)incurring committed fixed costs is less risky than using discretionary costs.
B)managers are usually responsible for committed fixed costs but not for discretionary fixed costs.
C)incurring discretionary fixed costs rather than committed fixed costs gives a company more flexibility in controlling costs.
D)companies are using more discretionary fixed costs because labor is easier to "remove" than technology.

Question

Quizplus · Accepted Answer

Committed fixed costs are expenses that a company must pay regardless of its level of production or sales, while discretionary fixed costs are expenses that a company can choose whether or not to incur. By choosing to incur discretionary fixed costs rather than committed fixed costs, a company gains more flexibility in controlling costs because it can adjust these expenses based on changes in market demand or other factors. This can be especially important for companies operating in uncertain or rapidly changing industries.

A Major Difference Between Committed and Discretionary Fixed Costs Is