An example of a discretionary cost for a firm that manufactures furniture is:
A) direct material.
B) advertising.
C) labour.
D) glue and nails.

Question

Quizplus · Accepted Answer

Discretionary costs are costs that a firm can choose to incur or not, based on their business needs. Advertising is an example of a discretionary cost, as a firm can decide to increase or decrease their advertising spend based on their marketing strategy and budget. Direct material, labour, and glue and nails are all examples of fixed or variable costs, which are necessary for the production of furniture and do not vary based on the firm's discretionary choice.

An Example of a Discretionary Cost for a Firm That