Which of the following costs would most likely be classified as variable assuming the account analysis method is used to determine cost behaviors?
A)Indirect materials.
B)Supervisory salaries.
C)Equipment maintenance.
D)Annual Christmas party.
E)Building occupancy costs.

Question

Quizplus · Accepted Answer

Indirect materials are materials that are not directly traceable to a specific product or service and are considered variable costs that vary with the level of production or activity. The account analysis method typically looks at historical cost trends to determine cost behavior, and indirect materials costs are likely to fluctuate with production or activity levels. Supervisory salaries are usually considered fixed costs because they do not vary with production or activity levels, while equipment maintenance and building occupancy costs may have elements of both fixed and variable costs. Annual Christmas party costs are likely to be considered discretionary or unrelated costs that are not typically used in cost behavior analysis.

Which of the Following Costs Would Most Likely Be Classified