Below Are Several Examples of Costs That Are Labeled Fixed

question 15

Essay

Below are several examples of costs that are labeled fixed or variable according to their typical accounting designations. Under which circumstances would any of these costs behave in a manner opposite to that listed?
a. Direct labor-variable.
b. Equipment depreciation-fixed.
c. Utilities (with a minimum charge)-variable.
d. Supervisory salaries-fixed.
e. Indirect materials purchased in given lot sizes that become spoiled within a few days-variable.

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Definitions:

Fiscal Policy

Involves government policies on taxation and spending that aim to influence a country's economic conditions, such as controlling inflation, unemployment, and promoting economic growth.

Transfer Payments

Payments made by the government to individuals through various social benefit programs, without the government receiving any goods or services in return.

Government Purchases

Expenditures by the government for goods and services that directly satisfy public consumption or are invested in public infrastructure.

Taxes

Taxes are compulsory financial charges or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.