COST ACCOUNTING
VARIABLE COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Dara makes bracelets and sells them in her shop. Which is a fixed cost for Dara’s business?
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the cost of the beads
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the cost of the string
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the cost of advertising
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rent for her shop
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Explanation:
Detailed explanation-1: -Fixed cost is a business expense that does not change regardless of the activity level of the business. Examples of fixed costs include rent, salaries, insurance, property taxes, interest expenses, depreciation, and potentially some utilities.
Detailed explanation-2: -Examples of fixed costs are rent and lease costs, salaries, utility bills, insurance, and loan repayments.
Detailed explanation-3: -Examples of fixed costs include rent, taxes, and insurance. Examples of variable costs include credit card fees, direct labor, and commission.
Detailed explanation-4: -Advertising cost is a fixed cost because these costs will remain constant or do not change with the change in the producing or selling units.
There is 1 question to complete.