Paula's Kennels is located in a small city in Nova Scotia. The company employs three pet attendants, four pet groomers, and two front office staff who book appointments and keep records. The Kennel provides a range of services for dogs and cats including boarding, grooming, and obedience training. The grooming area includes a small retail section that carries dog and cat food, pet supplies, and toys. Which of the following is the best example of a discretionary cost for Paula's Kennels?
A) Pet food
B) Facility rent
C) Wages of pet groomers
D) Professional travel for Paula

Question

Quizplus · Accepted Answer

Discretionary costs are those that can be adjusted or avoided by management decisions. The wages of pet groomers and the facility rent are fixed costs that must be paid regardless of the level of business activity. Pet food is a variable and necessary cost for the Kennel's daily operation, and not a discretionary cost. Professional travel for Paula is not essential for the daily operation of Paula's Kennels and can be avoided or adjusted, making it a discretionary cost.

Paula's Kennels Is Located in a Small City in Nova