In which of these short-term decision areas are fixed costs generally irrelevant?

Question

Quizplus · Accepted Answer

Fixed costs are generally irrelevant in short-term decision-making because they do not change with the decision at hand. Whether accepting a special order, closing a department, or making a make-or-buy decision, the focus is on the incremental costs and benefits that directly result from the decision. Fixed costs are typically sunk in the short term and do not influence these decisions.

In Which of These Short-Term Decision Areas Are Fixed Costs