Which of the Following Is Not an Indirect Fixed Cost

question 196

Multiple Choice

Which of the following is not an indirect fixed cost?

• A) Company president's salary
• B) Depreciation on the company building housing several profit centers
• C) Company personnel department costs
• D) Profit center supervisory salaries

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Definitions:

Marginal Costs

Marginal costs refer to the additional cost incurred by producing one more unit of a product or service.

Avoidable Costs

Costs that you get back if you shut down operations.

Variable Costs

Costs that vary directly with the level of production or sales volume, such as raw materials or labor expenses.

Fixed Costs

Business expenses that remain constant regardless of the level of production or sales activity, such as rent, salaries, and insurance.