1. Advertising and promotion costs of a do-it-yourself retailer 2. Surgical supplies used in a hospital's operating...
Question:
1. Advertising and promotion costs of a do-it-yourself retailer
2. Surgical supplies used in a hospital's operating room 3.
Aircraft depreciation charges of an airline 4
. Utility charges that include a minimum-use fee, for a small business 5.
Annual business licensing fee paid by a daycare center 6.
Truck fuel consumed by a road construction company
Required:
A. Classify each of these costs as variable, committed fixed, discretionary fixed, or semivariable.
B. Briefly describe the behavior of a per-unit variable cost as activity changes.
C. What elements are present in a semivariable cost that cause it to behave in a semivariable manner?
D. Generally speaking, does management have more flexibility when dealing with committed fixed costs or discretionary fixed costs?