Automation results in a shift away from variable costs toward more fixed costs.
Review Questions T/F
True
Review Questions T/F
73. In order for a cost to be variable it must vary with either units produced or units sold.
Review Questions T/F
False
Review Questions T/F
74. The concept of the relevant range does not apply to fixed costs.
Review Questions T/F
False
Review Questions T/F
75. Indirect costs, such as manufacturing overhead, are always fixed costs.
Review Questions T/F
False
Review Questions T/F
76. Discretionary fixed costs arise from annual decisions by management to spend in certain fixed cost areas.
Review Questions T/F
True
Review Questions T/F
77. Even if operations are interrupted or cut back, committed fixed costs remain largely unchanged in the short term because the costs of restoring them later are likely to be far greater than any short-run savings that might be realized.