When operations are interrupted or cut back, committed fixed costs are cut in the short term because the costs of restoring them later are likely to be far less than the short-run savings that are realized.

Question

Quizplus · Accepted Answer

Committed fixed costs cannot be easily or quickly eliminated in the short term when operations are interrupted or cut back, as they are long-term obligations that do not change with the level of business activity.

When Operations Are Interrupted or Cut Back, Committed Fixed Costs