What are discretionary fixed costs and committed fixed costs? - ProProfs Discuss
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What are discretionary fixed costs and committed fixed costs?



A. Management can easily change them (research and development); cannot easily be changed (rent, insurance)
B. Management can't easily change them (research and development); can easily be changed (rent, insurance)
C. Management can't easily change them (research and development); cannot easily be changed

This question is part of Managerial Accounting - Test 1
Asked by Rmerklen, Last updated: Mar 31, 2020

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2 Answers

A.Layla

A.Layla

Answered May 01, 2018

A discretionary fixed cost changes from a committed fixed cost, in that a committed cost commits a business to keep making installments over a specific period, (for example, the rent on an office building). A discretionary fixed cost is otherwise called an overseen fixed cost.

A discretionary fixed cost is a consumption for a period-particular cost or a fixed asset, which can be killed or lessened without immediate affecting the announced productivity of a business.

A committed cost is a venture that a business element has officially made and can't recuperate by any methods, and also commitments effectively made that the business can't escape. You ought to know about which costs are committed costs when you are auditing organization uses for conceivable reductions or asset deals.

 

rmerklen

Rmerklen

Answered Sep 11, 2017

Management can easily change them (research and development); cannot easily be changed (rent, insurance)
 

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