Costs that may be essential to the long-run achievement of the organization's goals,but that managers can almost reduce to zero in the short-run,are called ________.
A) capacity costs
B) committed fixed costs
C) discretionary fixed costs
D) mixed costs

Question

Quizplus · Accepted Answer

Discretionary fixed costs are those costs that can be reduced to zero in the short-run, but are still essential to the long-run success of the organization. Examples include advertising and research and development costs. Committed fixed costs, on the other hand, cannot be reduced in the short-run, such as lease payments for a building. Capacity costs and mixed costs are not necessarily related to the concept of costs that can be reduced to zero in the short-run.

Costs That May Be Essential to the Long-Run Achievement of the Organization's