Occidental Company is studying whether to drop a product because of ongoing losses. Costs that would be relevant in this situation would include variable manufacturing costs as well as:
A)factory depreciation.
B)avoidable fixed costs.
C)unavoidable fixed costs.
D)allocated corporate administrative costs.
E)general corporate advertising.

Question

Quizplus · Accepted Answer

Avoidable fixed costs are relevant because they can be eliminated if the product is dropped, impacting the decision.

Occidental Company Is Studying Whether to Drop a Product Because