Monroe Manufacturing produces and sells a product with a price of $100/unit. The following data has been prepared for its estimated upper and lower levels of activity. The fixed expenses for this company are

Question

Monroe Manufacturing produces and sells a product with a price of $100/unit. The following data has been prepared for its estimated upper and lower levels of activity.  The fixed expenses for this company are

Quizplus · Accepted Answer

Fixed expenses are costs that do not vary with changes in the level of activity, such as depreciation, office salaries, and advertising. Indirect materials and indirect labor are variable expenses that increase with increased production, while direct materials and direct labor are considered part of the cost of goods sold. Sales salaries are also a variable expense that increases with sales volume. Therefore, option A, depreciation, office salaries, and advertising, is the best choice.

Monroe Manufacturing Produces and Sells a Product with a Price