To understand unused capacity,it is necessary to distinguish engineered costs and ________.

Question

Quizplus · Accepted Answer

Unused capacity refers to the available but unutilized resources in a company. To understand this, it is necessary to distinguish between engineered costs (costs that are incurred regardless of the level of production) and discretionary costs (costs that can be adjusted according to the level of activity). Unused capacity is related to discretionary costs, as they represent the potential additional costs that could be incurred if the company were to operate at full capacity. Therefore, the best choice would be E - discretionary costs.

To Understand Unused Capacity,it Is Necessary to Distinguish Engineered Costs