Committed ﬁxed costs would include:
A)advertising.
B)research and development.
C)depreciation on buildings and equipment.
D)contributions to charitable organizations.
E)expenditures for direct labor.

Question

Quizplus · Accepted Answer

Committed fixed costs are costs that cannot be easily changed, regardless of the level of production or sales. Depreciation on buildings and equipment is an example of a committed fixed cost as it is a non-cash expense that is spread out over the useful life of the asset and cannot be avoided even if production or sales volumes decrease. Advertising, research and development, contributions to charitable organizations, and expenditures for direct labor are all examples of discretionary fixed costs, which can be adjusted in response to changes in the level of production or sales.

Committed ﬁXed Costs Would Include