Managers can eliminate ________ costs entirely for a given year in dire times such as a major recession.However,managers cannot eliminate ________ costs.
A) discretionary variable costs; committed variable costs
B) discretionary fixed costs; committed fixed costs
C) discretionary variable costs; committed fixed costs
D) committed fixed costs; committed variable costs

Question

Quizplus · Accepted Answer

In dire times, managers can eliminate discretionary fixed costs entirely for a given year, as they are nonessential and can be easily cut without affecting the business's operations. On the other hand, committed fixed costs, such as rent, salaries, and insurance, are essential to the business's operations and cannot be eliminated entirely. Therefore, the best choice would be B, i.e., discretionary fixed costs and committed fixed costs.

Managers Can Eliminate ________ Costs Entirely for a Given Year