The fixed asset account contains the original acquisition cost of a number of fixed assets, while the contra account (accumulated depreciation) contains the sum total of all the depreciation expense that has been charged against those assets over time. 2) Which of the following is a fixed cost with respect to units produced in a factory? If you lose your job or aggressively want to start saving, you could devote a few hours to culling your fixed expenses. 1 1 Clothing C. Entertainment D. Food My own account register C. My monthly bank statement: B. Some personal finance software lets you set a different amount from month to month for expenses that vary. B. fixed costs in total remain the same. Fixed costs are also allocated in the indirect expense section of the income statement which leads to operating profit. A. + Fixed expenses + Profits b. For example, with more production, expenses on raw materials will also increase. This is in contrast with variable expenses, which change. Depreciation is one common fixed cost that is recorded as an indirect expense. What is a static budget? D. the fixed costs will remain the same, but the variable cost per unit may change. These costs, such as depreciation expense, property tax expense and insurance expense, cannot be changed during short periods of time and are only The following are the general methods of depreciation available for use: Straight line. If a company is operating at the break-even point: a Its contribution margin will be equal to its variable expenses. C.the fixed costs and the variable cost per unit will not change. Non-operating expenses comprise interest expense (and income), and other expenses (income). Outside the relevant range, total fixed costs may change and/or variable costs per unit may change. a) A, B, C b) B, C, D c) A, C, D d) A, B, D View Answer / Hide Answer Which of the following is an example of a fixed expense? Business In the context of business, a fixed expense is anything that doesn't change with production volumes or strategy. B) Fixed cost remains certain from zero production to full capacity. If a company requires a profit of $30,000 (instead of breaking even), the $30,000 should be combined with the fixed expenses in order to compute the point at which the company will earn $30,000. The definition of fixed expenses is “any expense that does not change from period to period," such as mortgage or rent payments, utility bills, and loan payments. The following are examples of both business and personal fixed expenses. Rent B. On the income statement, which of the following would be classified as a variable cost? C. finished goods inventory. User: Which of the following is an example of a fixed expense?A. Depreciation. Account balance from ATM statement B. D. All of these. Which of the following is not a fixed cost? A) Property taxes B) Salary of plant manager C) Direct materials cost D) Straight-line depreciation Answer: C Difficulty: 1 19.1-12 A 15% increase in production volume will result in a: A) 15% increase in the variable cost per unit. Fixed manufacturing overhead totals $36,000 and fixed selling and administration expenses total $40,000. Finally, Amazon has charged a provision for income taxes and accounted for equity method investment activity. a. Freight-out b. a. a. Level: Medium LO: 5 Ans: D. 53. Sales = Contribution margin (Rs.) They are expenses that will have to be paid by the company even though there are any changes in business activities. b. A fixed prepayment per person to the healthcare provider for an agreed upon array of services is which of the following? Chapter 19: Cost-Volume-Profit Analysis 19.1-11 Which of the following is NOT a fixed cost? Food B. Clothing C. Entertainment D. Food Weegy: Rent is an example of a fixed expense. Which of the following represents a CVP equation? c. Lease charge. Fixed expenses are expenses which remain static, not fluctuating over time. Based on budgeted Sales b. Which of the following is a good way to improve your credit score? By continuing to use this site you consent to the use of cookies on your device as … a. d. Direct materials. C. variable costs increase in total. Which of the following would not appear as a fixed expense on the Selling and Administrative Expense Budget? D. Pay your bills on time. Question 1. B) 4,500 units. Construction cost of the item, which can include labor and employee benefits Assuming a beginning inventory of zero, production of 4,000 units and sales of 3,600 units, the dollar value of the ending inventory under variable costing would be: |Score 1|Ishm|Points 21335| User: The factor that has the greatest impact on your credit score is A. total amount owed. b Its margin of safety will be equal to zero. Which of the following is usually the largest fixed expense for a new vehicle - Answered by a verified Tutor We use cookies to give you the best possible experience on our website. Which of the following is the right formula for calculating total mixed cost? The company also has fixed sales salaries of $50,000. As such, it may spread the fixed cost of the lease at $10 per mug. Within the relevant range, as the number of units produced increases: A. the variable cost per unit remains the same. C) 8,500 units. For example, you may need a cell phone for work or health reasons. More specifically, assign the following costs to a fixed asset: Purchase price of the item and related taxes. Rent B. A. A static budget is a budget in which the amounts will not change even with significant changes in volume.. Fixed expenses totaled $54,000, variable expenses were $14.00 per unit, and the company reported a profit of $9,000 for the year. D) 9,000 units. If it produces 10,000 mugs a month, the fixed cost of the lease goes down, to the tune of … Fixed costs are not permanently fixed; they will change over time, but are fixed, by contractual obligation, in relation to the quantity of production for the relevant period. B. work in process inventory. 3. Total mixed cost = (Variable cost per unit x Number of units) + Total fixed cost The calculations for sales commissions and delivery expense, followed by the selling expenses budget, are shown in the following … Definition of Static Budget. types of credit in use. A. C. Move debt around frequently. The term “fixed expenses” can be used in reference to either personal or business finances. They remain constant for a … Any expense which is varying with levels of production is a variable expense. Using budget profit c. Using profit & Contribution ratio d. All of the given options 12. Some expenses can contain discretionary, variable, and fixed categories. C) Behavior of different costs is linear D) Selling per price unit remains constant. Office salaries c. Property taxes d. Depreciation 74. 10. Depreciation is used to gradually charge the book value of a fixed asset to expense. In contrast to a static budget, a company's sales department might have a flexible budget.In the flexible budget, the sales commissions expense budget would be stated as a percentage of sales. A. Sales commissions are 4% of sales dollars, and delivery expense, also called freight out by some companies, is $0.10 per unit sold. B) 15% increase in total mixed costs. Property taxes. Expense Ratio: The expense ratio is a measure of what it costs an investment company to operate a mutual fund . Which of the following account records would have the most current balance? Fixed and Variable Expenses Management budgets fixed costs, such as advertising, and keeps control over the expense. 52. b. financial budgets and a long-term plan. Finance Software for Variable Expenses . For example, a company may have unexpected and unpredictable expenses unrelated to production, such as warehouse costs and the like that are fixed only over the time period of the lease. Fixed expense are those expenses that will remain same despite any change in the sales amount, production or some other activity. d. Fixed costs 11. A. Apply for several credit cards. Fixed expenses divided by the contribution margin per unit is the break-even point in UNITS (not the break-even point in dollars). A) monthly rent payment for the building B) electricity expenses C) utilities cost of the building D) direct material costs a. The break-even point for Mason Company is: A) 10,500 units. Operating expenses consist of the cost of sales, fulfillment, marketing, technology and content, general and administrative, and others. The major lesson here is that in spite of its name, “fixed” expenses are not necessarily set in stone. Inventory c. Carry Expense d. Depreciation Expense Companies know how much they're planning to spend on advertising over a particular period and can calculate the percentage of that expense as part of their unit costs. 1 17. B. D. payment history. B. number of credit inquiries.C. Choosing between a brand-new phone or an inexpensive or refurbished phone is a variable expense. The costs to assign to a fixed asset are its purchase cost and any costs incurred to bring the asset to the location and condition needed for it to operate in the manner intended by management. This includes most types of employee salary with the exception of labor that is scaled up and down with business volumes. Fixed Expenses – Definition, Examples and Lists. The Benefits of Saving Money on Fixed Expenses . Which of the following are assumptions for break-even analysis? Committed fixed costs relate to costs that the company will incur over the long-term. D. both raw materials inventory and work in process inventory. 6. Entertainment C. 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