Fixed costs may be relevant in a decision.

Question

Quizplus · Accepted Answer

Fixed costs are costs that do not change with changes in the level of production or sales. They can be relevant in a decision-making process as they need to be considered in determining the profitability of a product or service. For example, if a company is considering introducing a new product, they would need to consider the fixed costs associated with producing and selling that product in order to determine if it would be profitable.

Fixed Costs May Be Relevant in a Decision