Discuss the following: "The fixed cost vs. variable cost distinction is an oversimplification of the economic facts of life. Students and even practitioners of accounting are often misled by this distinction in the sense that the ease with which people speak of fixed and variable costs leads to the false conclusion that fixed and variable costs represent two homogeneous pools of costs. We would all be better off if we spent more time emphasizing the fact that some costs are more or less fixed (or more or less variable) than other costs rather than the fact that costs can be classified into fixed and variable categories."

LO.1