32. (Committed versus discretionary costs) A list of committed and discretionary costs follows: Annual audit fees Internal
Question:
32. (Committed versus discretionary costs) A list of committed and discretionary costs follows:
Annual audit fees Internal audit salaries Annual report preparation and printing Marketing research Building flood insurance Preventive maintenance Charitable contributions Property taxes Corporate advertising Quality control inspection Employee continuing education Research and development salaries Equipment depreciation Research and development supplies Interest on bonds payable Secretarial pool salaries
a. Classify each of the above costs as normally being either committed (C)
or discretionary (D).
b. Which of the above costs may be either committed or discretionary based on management philosophy?
c. For the expenses marked discretionary in part (a), provide a monetary or nonmonetary surrogate output measure. For each output measure, briefly discuss any objections that may be raised to it.
Step by Step Answer:
Cost Accounting Traditions And Innovations
ISBN: 9780324180909
5th Edition
Authors: Jesse T. Barfield, Cecily A. Raiborn, Michael R. Kinney