Discretionary fixed costs:
A)have a planning horizon that covers many years.
B)may be reduced for short periods of time with minimal damage to the long-run goals of the organization.
C)cannot be reduced for even short periods of time without making fundamental changes.
D)are most effectively controlled through the effective utilization of facilities and organization.

Question

Quizplus · Accepted Answer

Discretionary fixed costs are those costs that can be adjusted or reduced for short periods of time without damaging the long-term goals of the organization. This type of cost is dependent on management's discretion rather than being directly tied to production or sales volume. As such, they can be reduced without affecting the organization's long-term viability. However, discretionary fixed costs cannot be eliminated entirely. Examples of discretionary fixed costs include advertising, research and development, and employee training programs.

Discretionary Fixed Costs