Of the Following Choices, Which One Is a Common Fixed

question 48

Multiple Choice

Of the following choices, which one is a common fixed cost?

• A)profit centre manager's salary
• B)sales clerks' salaries
• C)costs from a central payroll department to create paycheques for a cost centre's employees
• D)depreciation on a responsibility centre's equipment

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Definitions:

Cumulative Effect

The aggregate impact of an accounting change or policy on a company's financial statements over time.

Average Cost

A method for inventory and cost of goods sold valuation, calculated by dividing the total cost by the number of items.

LIFO Method

Last In, First Out method; an inventory valuation technique where the most recently produced items are recorded as sold first.

Prospective Treatment

An approach in accounting where changes are applied to transactions and events from a specific date forward.