Costs arising from the possession of facilities,equipment and a basic organizational structure are ________.
A) capacity costs
B) discretionary costs
C) committed fixed costs
D) engineered costs

Question

Quizplus · Accepted Answer

Committed fixed costs are costs that cannot be reduced even if there is no production, such as rent or property taxes on a building. These costs are committed to the organization's basic structure and the possession of facilities and equipment. Capacity costs relate to the cost of providing the ability to produce goods or services, while discretionary costs are costs that can be reduced or eliminated without affecting the organization's basic structure. Engineered costs are costs that can be accurately predicted based on specific inputs and are heavily influenced by the organization's technical production processes.

Costs Arising from the Possession of Facilities,equipment and a Basic