An example of a discretionary fixed cost for a clothing manufacturer is
A)an annual contract for television advertising cost.
B)a 10-year lease on an office building.
C)yards of fabrics used.
D)thread used.

Question

Quizplus · Accepted Answer

An annual contract for television advertising cost is a discretionary fixed cost because it is a fixed cost that management can decide on at a certain level of discretion, unlike costs directly associated with production like materials (fabrics and thread) or long-term commitments like a lease.

An Example of a Discretionary Fixed Cost for a Clothing