The expenses that result when organizations acquire many multiperiod service capacities by paying cash up front or by entering into an explicit contract that requires periodic cash payments are called:
A)Managed fixed expenses
B)Committed fixed expenses
C)Discretionary fixed expenses
D)Period expenses

Question

Quizplus · Accepted Answer

Committed fixed expenses are those expenses that result when organizations acquire many multiperiod service capacities by paying cash up front or by entering into an explicit contract that requires periodic cash payments. These expenses are fixed in nature and cannot be easily adjusted in the short term. Examples include rent, insurance premiums, and payments on long-term leases.

The Expenses That Result When Organizations Acquire Many Multiperiod Service