For planning, control, and decision-making purposes:
A)fixed costs should be converted to a per unit basis.
B)discretionary fixed costs should be eliminated.
C)variable costs should be ignored.
D)mixed costs should be separated into their variable and fixed components.

Question

Quizplus · Accepted Answer

Separating mixed costs into their variable and fixed components is essential for accurately analyzing and predicting costs. This information is necessary for decision-making, planning, and control purposes. Converting fixed costs to a per unit basis and eliminating discretionary fixed costs may be useful in some situations, but they do not provide as much valuable information as separating mixed costs. Ignoring variable costs would also result in incomplete and inaccurate cost analysis.

For Planning, Control, and Decision-Making Purposes