An example of a discretionary fixed cost is
A)research and development costs.
B)lease on warehouse space.
C)sales commissions.
D)number of bolts used.

Question

Quizplus · Accepted Answer

Research and development costs are a discretionary fixed cost because the company has control over how much they spend in this area and can choose to increase or decrease the amount spent based on their needs and priorities. The other options, such as lease on warehouse space and number of bolts used, are fixed costs but are not discretionary as they are necessary for the functioning of the business. Sales commissions, on the other hand, are a variable cost that fluctuate with the level of sales and are not fixed.

An Example of a Discretionary Fixed Cost Is