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If a segment is eliminated, (1) fixed costs that are not traced to the segment will not change. (Enter only one word per blank.)

1 Answer

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Final answer:

Fixed costs remain unchanged when a business segment is eliminated, as they are not reliant on the level of production or the operations of the specific segment.

Step-by-step explanation:

When discussing costs within a business context, we often refer to both fixed costs and variable costs. Fixed costs are expenditures that do not change regardless of the level of production. This is because they are associated with fixed inputs, such as capital, which do not vary in the short run. An example of a fixed cost is the rent on a factory or retail space, which remains constant no matter how much or how little is produced. When eliminating a business segment, these fixed costs that are not directly traced to the segment generally remain unchanged, since they are not dependent on the segment's operations.

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