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Explain discretionary fixed costs and committed fixed cost?
Tanviracma
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
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∙ 12y ago
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Do committed fixed costs have a short-term planning horizon?
"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!
What are some examples of committed fixed costs?
leasing costs, committed costs are fixed costs that are caused by the possession of facilities, materials, etc.
Why are committed fixed costs the most difficult of fixed costs to change?
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.
Does committed fixed cost have a short term planning horizon usually one year?
"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!
What is an example of a fixed expense thats paid for with discretionary funds?
Budget items that remain the same month to moth is an example of a fixed expense that is paid for with discretionary funds. Discretionary fund is the money that is subject to one's own control.
What items would be paid for with discretionary income?
Anything can be paid for with discretionary income. That's what makes it discretionary. "Discretionary income" isn't a real "thing". It's actually all just income. "Discretionary" income refers to what's left over after you've paid for necessities: food, water, shelter, taxes, "fixed costs", things like that. So, probably the item among the following that isn't actually a NEED is the one the question is looking for.
How do you explain fixed costs really being variable when the more you produce the less they become?
The basic point is that fixed costs, even though they stay the same, become less in relation to the increased production.
Does committed fixed costs have a short term planning horizon-usually one year?
False
What does fixed costs means?
what does fixed costs mean
What is a fixed expense that's paid for with discretionary funds?
The cable TV bill
Why are Fixed costs also called capacity costs?
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.
Variable costs are relevant and fixed costs are irrelevant?
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.
