The advertising costs incurred by Pepsi to air its commercials during the hockey season can best be described as a:
A) Variable cost.
B) Fixed cost.
C) Prime cost.
D) Conversion cost.

Question

Quizplus · Accepted Answer

The advertising costs for airing commercials during the hockey season are considered a fixed cost because they remain constant regardless of the volume of goods sold or produced. These costs do not vary with the level of production or sales activity.

The Advertising Costs Incurred by Pepsi to Air Its Commercials