which of the following statements is true of discretionary fixed costs?\na) they have a planning horizon…

which of the following statements is true of discretionary fixed costs?\na) they have a planning horizon that covers many years.\nb) they cant be reduced for even short periods of time without making fundamental changes.\nc) theyre most effectively controlled through the effective utilization of facilities and organization.\nd) they may be reduced for short periods of time with minimal damage to the long - run goals of the organization.

which of the following statements is true of discretionary fixed costs?\na) they have a planning horizon that covers many years.\nb) they cant be reduced for even short periods of time without making fundamental changes.\nc) theyre most effectively controlled through the effective utilization of facilities and organization.\nd) they may be reduced for short periods of time with minimal damage to the long - run goals of the organization.

Answer

Brief Explanations:

Discretionary fixed costs are costs that are not essential for the short - term operation of a business but are important for long - term goals. They can be adjusted in the short - term.

  • Option A: Discretionary fixed costs usually have a short - term planning horizon (e.g., annual budgets for advertising), not many years.
  • Option B: They can be reduced in the short - term. For example, a company can cut back on advertising (a discretionary fixed cost) for a few months without fundamental changes.
  • Option C: Committed fixed costs (e.g., depreciation of plant and equipment) are controlled through utilization of facilities, not discretionary fixed costs.
  • Option D: Since they are not immediately necessary for day - to - day operations (like research and development or advertising), they can be reduced for short periods with minimal long - term damage.

Answer:

D. They may be reduced for short periods of time with minimal damage to the long - run goals of the organization.