Avoidable fixed costs are irrelevant in adding or dropping departments?

Avoidable fixed costs are relevant in adding or dropping departments because they represent costs that can be eliminated or reduced by making changes to the organization's operations. When considering whether to add or drop a department, it is important to take into account the impact on avoidable fixed costs, as this can affect the overall profitability and efficiency of the organization. By analyzing avoidable fixed costs, decision-makers can better understand the financial implications of adding or dropping a department and make more informed decisions.

Correct