(Appendix 5A)Which of the following statements concerning ease of adjustment codes is NOT correct?
A) "Green" costs adjust automatically to changes in activity.
B) "Yellow" costs could be adjusted to changes in activity,but such adjustments require management action; the adjustment is not automatic.
C) "Red" costs cannot be adjusted to changes in activity.
D) The costs of idle capacity and organization-sustaining costs are not assigned codes.

Question

Quizplus · Accepted Answer

This statement is not correct since "Red" costs can be adjusted to changes in activity, but the adjustment requires significant management action and may not be easy to make.

(Appendix 5A)Which of the Following Statements Concerning Ease of Adjustment