The term “‘discretionary costs’’ refers to those a Costs which management decides to incur in the current period to enable the company to achieve objectives other than the filling of orders placed by custemers b Costs which are likely to respond to the amount of attention devoted to them by a specified manager Costs which are governed mainly by past decisions that established the present levels of operating and organizational capacity and which only change slowly in response to small changes in capacity Amortization of costs which were capitalized in previous periods Costs which will be unaffected by current managerial decisions

(CMA adapted.)