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 those expenses that do not change with the level of activity. Depreciation and office salaries are examples of fixed expenses, and advertising can also be considered a fixed expense if it is a set amount regardless of the level of activity. Indirect materials and indirect labor are variable expenses because they vary with the level of activity. Direct materials and direct labor are also variable expenses. Therefore, the best choice for fixed expenses in this scenario is A) depreciation, office salaries, and advertising.

Monroe Manufacturing Produces and Sells a Product with a Price