Determine the total operating fixed costs (TOFC) based on the following: administrative expenses = $200,000; marketing expenses = $180,000; depreciation expenses = $100,000; and interest expenses = $20,000.
A)$380,000
B)$400,000
C)$480,000
D)$500,000

Question

Quizplus · Accepted Answer

Total Operating Fixed Costs (TOFC) are calculated by adding up all fixed costs associated with the operation of a business, excluding interest expenses since they are considered financial costs, not operating costs. Therefore, TOFC = administrative expenses + marketing expenses + depreciation expenses = $200,000 + $180,000 + $100,000 = $480,000.

Determine the Total Operating Fixed Costs (TOFC) Based on the Following