When adequate capacity exists in the current year to produce next year's output,the cost effect of growth for capacity-related fixed costs will be zero.

Question

Quizplus · Accepted Answer

When there is adequate capacity in the current year, it means that there are no additional capacity-related fixed costs required for next year's production. Therefore, there will be no cost effect of growth for these fixed costs and the answer is true.

When Adequate Capacity Exists in the Current Year to Produce