Asked by Blake Lansing on Jun 20, 2024
Verified
Significant reductions in committed fixed costs can usually be made on a temporary basis without seriously impairing the long-term goals of a firm.
Committed Fixed Costs
Long-term fixed costs that cannot be easily altered in the short run, such as leases or contracts.
- Understand the definitions and behaviors of direct and indirect costs, as well as committed and discretionary fixed costs.
Verified Answer
SU
Shafira UlinnuhaJun 23, 2024
Final Answer :
False
Explanation :
Committed fixed costs are long-term, cannot be easily changed, and are necessary for the operation of a firm. Reducing these costs significantly and temporarily could impair the firm's ability to achieve its long-term goals, as these costs often involve investments in essential assets and capabilities.
Learning Objectives
- Understand the definitions and behaviors of direct and indirect costs, as well as committed and discretionary fixed costs.
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