ABC assumes all costs are ________ because over the long run management can adjust the amount of resources employed.
A) fixed
B) variable
C) committed
D) nondiscretionary

Question

Quizplus · Accepted Answer

ABC assumes all costs are variable because over the long run management can adjust the amount of resources employed. This means that as production increases, variable costs increase and as production decreases, variable costs decrease. Fixed costs, on the other hand, remain the same regardless of the level of production. Committed costs are fixed costs that cannot be easily adjusted, such as rent for a long-term lease or payments on a loan. Nondiscretionary costs are costs that cannot be avoided or reduced, such as taxes or insurance.

ABC Assumes All Costs Are ________ Because Over the Long