COST ACCOUNTING
COST BEHAVIORS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following is the least likely to be a fixed cost?
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Utilities
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Executive management salaries
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Advertising
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Copier maintenance
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Explanation:
Detailed explanation-1: -Answer and Explanation: The correct answer is option c. Cost of Commodity Inputs.
Detailed explanation-2: -Wages paid to workers however can vary as the number of workers increase or decrease. Hence it is not considered as a fixed cost.
Detailed explanation-3: -Answer and Explanation: The correct answer is option d. property taxes. A fixed cost does not change with the production volume within a relevant range for a given period of time.
Detailed explanation-4: -Examples of fixed costs are rent and lease costs, salaries, utility bills, insurance, and loan repayments. Some kinds of taxes, like business licenses, are also fixed costs.
There is 1 question to complete.