Question

Amounts spent for charitable contributions are an example of a(n):

A. discretionary variable cost.
B. committed variable cost.
C. committed fixed cost.
D. engineered cost.
E. discretionary fixed cost.

Answer 1

Answer:

The correct option is E

Explanation:

A discretionary fixed cost is an expenditure for a period specific cost or a fixed asset which can be eliminated or reduced without affecting the reported profitability of a business. Advertising campaigns, charitable contributions, Employee training can all be classified as discretionary fixed cost.