An example of a committed fixed cost is:
A)a training program for salespersons.
B)executive travel expenses.
C)property taxes on the factory building.
D)new product research and development.

Question

Quizplus · Accepted Answer

Property taxes on the factory building are an example of committed fixed costs since they are necessary expenses that cannot be easily adjusted or reduced in the short term. A training program for salespersons and new product research and development are examples of discretionary fixed costs that can be adjusted or eliminated based on managerial decisions. Executive travel expenses are typically classified as variable costs since they fluctuate with the level of business activity.

An Example of a Committed Fixed Cost Is