The following are different categories of costs: Variable, Fixed (committed), Fixed (discretionary), and Mixed. Identify what type...

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Finance

The following are different categories of costs: Variable, Fixed(committed), Fixed (discretionary), and Mixed.

Identify what type of cost is best represented by the followingexamples of costs and briefly explain why.

The answer to the first one, Rent, is provided as an example: Rentis a fixed, committed cost because it does not change due todifferences in activity levels. In other words, rent is always acost that will be due regardless of business activity level. It isgenerally considered a committed cost because once you sign thelease you are committed to pay rent for the life of the lease.
Rent: Answer explained above
Property taxes on land and building
Billboard advertising campaign
Raw materials used in the manufacturing process
Employee picnic with band, food, and door prizes

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Property taxes on land and building This is Fixed Committed cost This cost is fixed irrespective of activity level This is a statutory expense without any discretion Billboard See Answer

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The following are different categories of costs: Variable, Fixed(committed), Fixed (discretionary), and Mixed.Identify what type of cost is best represented by the followingexamples of costs and briefly explain why.The answer to the first one, Rent, is provided as an example: Rentis a fixed, committed cost because it does not change due todifferences in activity levels. In other words, rent is always acost that will be due regardless of business activity level. It isgenerally considered a committed cost because once you sign thelease you are committed to pay rent for the life of the lease.Rent: Answer explained aboveProperty taxes on land and buildingBillboard advertising campaignRaw materials used in the manufacturing processEmployee picnic with band, food, and door prizes