________ arise as a result of strategic decisions about the scale and scope of an organization's activities.
A)Capacity costs
B)Discretionary fixed costs
C)Mixed costs
D)Step costs

Question

Quizplus · Accepted Answer

Capacity costs are those costs that arise as a result of strategic decisions about the scale and scope of an organization's activities. These costs are fixed in the short run but can potentially be adjusted in the long run. Examples of capacity costs include expenses related to building new facilities, increasing inventory levels, and hiring additional staff. Discretionary fixed costs are costs that are intentionally incurred and can be easily reduced or eliminated, while mixed costs have both fixed and variable elements. Step costs are fixed costs that increase in step-like increments as production volume increases.

________ Arise as a Result of Strategic Decisions About the Scale