Of the costs listed below, which would most likely be considered as a discretionary fixed cost?
A)Research costs for new manufacturing products.
B)Depreciation of factory building.
C)Insurance for the factory building.
D)Property taxes for factory.

Question

Quizplus · Accepted Answer

Research costs for new manufacturing products are considered discretionary fixed costs because they are usually decided on a case-by-case basis and can be adjusted based on the company's budget and priorities. Discretionary fixed costs are expenses that are planned in advance and can be reduced or eliminated if necessary. The other options, depreciation of factory building, insurance for the factory building, and property taxes for factory, are fixed costs but they are not discretionary because they are necessary for the operation of the factory and cannot be easily adjusted.

Of the Costs Listed Below, Which Would Most Likely Be