Which term describes costs that a firm does not have to incur in the short run to operate the business?
A)discretionary costs.
B)committed costs.
C)required costs
D)All of the answers are correct.

Question

Quizplus · Accepted Answer

Discretionary costs are costs that a firm can choose whether or not to incur, such as advertising expenses or employee training. These costs are not necessary for the firm to conduct its daily operations in the short run. Committed costs, on the other hand, are costs that are necessary for the firm to operate, such as rent or salaries. Required costs is not a commonly used term in accounting or finance. Therefore, the correct answer is A) discretionary costs.

Which Term Describes Costs That a Firm Does Not Have