The fixed costs required to achieve a desired level of production or to provide a desired level of service, while maintaining product or service attributes such as quality, are referred to as
A) committed costs.
B) mixed costs.
C) capacity costs.
D) engineered costs.

Question

Quizplus · Accepted Answer

Capacity costs refer to fixed costs that are required to maintain the ability to provide a certain level of production or service, without compromising quality or other attributes. Committed costs refer to expenses that have already been incurred and cannot be easily changed, mixed costs include both fixed and variable components, and engineered costs refer to costs associated with designing and developing a product or process.

The Fixed Costs Required to Achieve a Desired Level of Production