Haverton Industries is studying whether to drop a product because of ongoing losses. Costs that would be relevant in this situation would include variable manufacturing costs as well as:
A) factory depreciation.
B) avoidable fixed costs.
C) unavoidable fixed costs.
D) allocated corporate administrative costs.
E) general corporate advertising.

Question

Quizplus · Accepted Answer

Avoidable fixed costs are relevant because they can be eliminated if the product is dropped, impacting the decision.

Haverton Industries Is Studying Whether to Drop a Product Because