COST ACCOUNTING
COST BEHAVIORS
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Property taxes
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Rent
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Research and development
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Management training programs
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Detailed explanation-1: -Explanation: The government charges the property taxes based on the property owned by a business entity. The firm has no control over these expenses because it cannot change the amount of taxes to be paid. Therefore, this cost is considered the least controllable fixed cost.
Detailed explanation-2: -Examples of Fixed Costs Fixed costs include any number of expenses, including rental lease payments, salaries, insurance, property taxes, interest expenses, depreciation, and potentially some utilities.
Detailed explanation-3: -Examples of controllable costs are advertising, bonuses, direct materials, donations, dues and subscriptions, employee compensation, office supplies, and training. The reverse of a controllable cost is a fixed cost, which can only be altered over a long period of time. Examples of fixed costs are rent and insurance.
Detailed explanation-4: -Controllable costs are considered so when the decision of taking on the cost is made by one individual. Common examples of controllable costs are office supplies, advertising expenses, employee bonuses, and charitable donations.