A committed fixed cost
A) can easily be changed.
B) often involves a long-term contract.
C) changes when the level of output changes.
D) all of these are correct

Question

Quizplus · Accepted Answer

Committed fixed costs are costs that a company has already committed to pay, often through a long-term contract or agreement. These costs cannot easily be changed in the short term, so they are considered fixed. Option A is incorrect because committed fixed costs are not easily changed. Option C is incorrect because committed fixed costs do not change with the level of output.

A Committed Fixed Cost