False
Some committed fixed costs are the most difficult of fixed costs to change because they are required to maintain basic operations. For example, rent is a fixed cost that is difficult to change because it is bound by a lease.
E-commerce reduces fixed costs because it eliminates or reduces many fixed costs such as location, employees and insurance.
There is no fixed answer because all costs are subject to change in the long-run.
Total Costs = Fixed Cost + Variable Cost soVariable Cost = Total Costs - Fixed Cost.
Fixed costs are costs that do not vary with the level of output, such as rent and insurance premiums. Variable costs are costs that change with the level of output, such as wages and raw materials.
it doens't
leasing costs, committed costs are fixed costs that are caused by the possession of facilities, materials, etc.
"A committed fixed cost has a long future planning horizon- more than on year. A discretionary fixed cost has a short future planning horizon-under a year." Source: http://www.drtaccounting.com/2008/08/discretionary-fixed-cost-committed.html Another source: Just got the answer correct for my Accounting quiz!
Some committed fixed costs are the most difficult of fixed costs to change because they are required to maintain basic operations. For example, rent is a fixed cost that is difficult to change because it is bound by a lease.
"A committed fixed cost has a long future planning horizon- more than on year. A discretionary fixed cost has a short future planning horizon-under a year." Source: http://www.drtaccounting.com/2008/08/discretionary-fixed-cost-committed.html Another source: Just got the answer correct for my Accounting quiz!
Discretionery Fixed Cost: It is cost which arise from annual decisions of management to spend in specific fixed costareas, such as marketing and research.Commited Fixed Cost:These types of costs relate to a company's investment in assets such as facilities and equipment. Once such costs have been incurred, the company is required to make future payments
what does fixed costs mean
Fixed costs are considered capacity costs because if a company expands, fixed costs will change. Additionally, if a company adds more resources, fixed costs will change.
Generally variable costs are relevant costs but if due to any decision fixed costs are also going to affected then fixed costs are also relevant costs.
Yes normally fixed costs are period costs because these costs have to be paid no matter production done or not.
When fixed costs decrease, what does this do for sales?
Fixed costs are assigned to all products. Variable costs are assigned only to the product that led to the cost.