Question

Unavoidable fixed costs are __________.

A. irrelevant to the decision of whether to discontinue a product line because they will differ between alternatives.
B. relevant to the decision of whether to discontinue the department.
C. relevant to the decision because they will increase as production increases.
D. irrelevant to the decision of whether to discontinue a product line because they will not differ between alternatives.

Answer 1

Irrelevant to the decision of whether to discontinue a product line because they will not differ between alternatives.

Step-by-step explanation:

Unavoidable fixed costs can be defined as the costs that is sustained by an organization irrespective of if an activity is carried out or not.

Unavoidable costs are the costs that are encountered by a lot of businesses, this cost cannot be prevented even though production activities in the company are suspended in the short-run. These fixed costs are unavoidable and uncontrollable.

Unavoidable fixed costs is as a result of the various risks incurred by an organization inorder to stay relevant in the market. Example of unavoidable costs include tax payment, rental payments.