A company currently produces both regular and deluxe models of a particular product. The deluxe model requires the company to buy special metal trim for decoration. If the company stops producing the deluxe model, it will no longer need to buy the metal trim. In considering whether to stop producing the deluxe model, the trim is best characterized as
A) A capacity cost
B) An avoidable cost
C) An interchangeable cost
D) A fixed cost

Question

Quizplus · Accepted Answer

The metal trim is a cost that can be avoided if the company stops producing the deluxe model. Therefore, it is an avoidable cost.

A Company Currently Produces Both Regular and Deluxe Models of a Particular