Which of the following is an example of a discretionary fixed cost?
A) depreciation of equipment
B) advertising costs
C) rental of machinery
D) insurance on automobiles

Question

Quizplus · Accepted Answer

Discretionary fixed costs are those costs that are not required for the operation of the business but are incurred at the discretion of management. Advertising costs would fall under this category as it is a cost that can be controlled by management and is not essential to the operation of the business. Depreciation of equipment, rental of machinery, and insurance on automobiles are all examples of fixed costs, but they are not discretionary as they are necessary for the operation of the business.

Which of the Following Is an Example of a Discretionary