Which of the following is an example of a committed fixed cost?
A) the cost Coca-Cola pays for a billboard along the interstate
B) the cost of manufacturing equipment
C) the cost of training employees
D) the cost of developing new products

Question

Quizplus · Accepted Answer

Committed fixed costs are long-term, significant investments that can’t be adjusted easily. Manufacturing equipment would be a committed fixed cost because it is a major investment, and it would be difficult to reduce or eliminate the cost without significantly impacting the company’s operations. The other options are not necessarily committed fixed costs because they can be adjusted more easily.

Which of the Following Is an Example of a Committed