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Higado Confectionery Corporation has a number of store locations throughout North America. In income statements segmented by store, which of the following would be considered a common fixed cost?: a. Store building depreciation expense, b. the cost of corporate advertising aired during the Super Bowl, c. store manager salaries, d. all of these

Answer :

Answer:

The correct answer is letter "B": the cost of corporate advertising aired during the Super Bowl.

Explanation:

Fixed costs are business expenses that do not change as the production level goes up or down. Amortization, insurance, interest expense, property taxes, rent, and utilities are considered fixed costs. Advertising is considered a discretionary fixed cost, which implies, the investment dedicated to it will depend on what management considers necessary.

Thus, advertising in the Super Bowl could be considered as a discretionary fixed cost by Higado Confectionery Corporation.

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