Which of the following statements concerning ease of adjustment codes is incorrect?
A)"Green" costs adjust automatically to changes in activity.
B)"Yellow" costs could be adjusted to changes in activity,but such adjustments require management action;the adjustment is not automatic.
C)"Red" costs cannot be adjusted to changes in activity.
D)The costs of idle capacity and organization-sustaining costs are not assigned codes.

Question

Quizplus · Accepted Answer

This statement is incorrect because red costs can be adjusted to changes in activity, but only with significant management action such as revising the company's product lines, changing its production processes, or shutting down a plant or department.

Which of the Following Statements Concerning Ease of Adjustment Codes