When there is idle capacity, which costs are most likely to be IRRELEVANT?

Name: When there is idle capacity, which costs are most likely to be IRRELEVANT?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When there is idle capacity, fixed costs are most likely to be irrelevant because these costs do not change based on the level of production. Variable costs change with the level of production and incremental costs and opportunity costs are directly related to taking on additional production, which is not the case when there is idle capacity.

When There Is Idle Capacity, Which Costs Are Most Likely