Which of the Following Would Be Classified as a Fixed

question 467

Multiple Choice

Which of the following would be classified as a fixed cost for the local supermarket?

• A) The cost of the boxes of cereal sold in the store.
• B) The salary and any overtime paid the store's manager.
• C) The rent from the six-year lease for the building the store uses.
• D) The Social Security tax the store pays the federal government on the workers' income.

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Definitions:

Trading Investment

Securities purchased by a company not for long-term holding but rather for generating profit from short-term price fluctuations.

Common Shares

Equity investments representing ownership in a company, entitling holders to dividends and voting rights in certain decisions.

Cost Model

A method of accounting where assets are carried at their cost minus any accumulated depreciation and impairment losses.