Asked by Chintan Kothari on Jun 17, 2024
Verified
Fixed costs should not be ignored when evaluating how well a manager has controlled costs.
Fixed Costs
Expenses that remain constant for a company irrespective of the level of production or sales.
- Understand the significance of including both fixed and variable costs in the flexible budget for accurate performance evaluation.
Verified Answer
JB
Justin BaileyJun 17, 2024
Final Answer :
True
Explanation :
Fixed costs are an important component of overall costs and cannot be easily controlled by a manager in the short term. Therefore, when evaluating how well a manager has controlled costs, fixed costs should not be ignored.
Learning Objectives
- Understand the significance of including both fixed and variable costs in the flexible budget for accurate performance evaluation.