Question

Fixed costs that do not differ between two alternatives are A. irrelevant to the decision. B. relevant to the decision. C. considered opportunity costs. D. important only if they represent a material dollar amount.

Answer 1

Answer:

A. irrelevant to the decision.

Explanation:

There are primarily two types of costs, i.e. variable costs and the fixed costs. The variable cost is the cost that changes when the level of production changes, whereas the fixed cost is the cost that remains unchanged whether the level of production changes or not. Thus, the variable cost contains indirect material, indirect labor, and factory supplies.

And, the fixed cost contains rent expense,  supervision, taxes ,and depreciation expense.

Therefore, it is not relevant at the time of decisions