The more the cost base is composed of fixed or indirect costs,the more straightforward it is for managers to use cost reduction strategies to protect the organization's profitability in response to decreases in demand for products and services.

Question

Quizplus · Accepted Answer

Fixed or indirect costs do not vary with production levels, making it challenging to reduce them quickly in response to decreased demand, unlike variable costs which can be adjusted more easily.

The More the Cost Base Is Composed of Fixed or Indirect