Unlike variable costs,fixed costs of resources (such as for line supervision)cannot be quickly and easily changed to match the resources needed or used.

Question

Quizplus · Accepted Answer

Fixed costs are not easily adjustable in the short run. They are committed costs that a company has to bear regardless of the level of production or sales. Examples include rent, salaries, insurance, property taxes, etc. These costs may change in the long run as the company expands, relocates, or restructures. However, in the short run, they are considered sunk costs that cannot be recovered or avoided. Hence, managers should focus on controlling variable costs such as raw materials, direct labor, and energy costs, which can be adjusted more flexibly based on the level of activity.

Unlike Variable Costs,fixed Costs of Resources (Such as for Line