Which of the Following Is an Example of a Step-Fixed

question 57

Multiple Choice

Which of the following is an example of a step-fixed cost?

• A)cost of disposable surgical scissors, which are purchased in increments of 100
• B)cost of soaking solution to clean jewelry (Each jar can soak 50 rings before losing effectiveness.)
• C)cost of tuition at £300 per credit hour up to 15 credit hours (Hours taken in excess of 15 hours are free.)
• D)cost of disposable gowns used by patients in a hospital

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Definitions:

Rental Income

Income received from renting out property, such as real estate or personal property, which must be reported on tax returns and is subject to income tax.

Tax Year

The 12-month period for which tax is calculated. It can be a calendar year or a fiscal year, depending on the taxpayer.

Depreciation Expense

A non-cash expense that reduces the value of an asset over time due to wear and tear, ageing, or obsolescence.

Schedule E

Schedule E is a form used for tax filing in the U.S. that reports income and losses from rental property, royalties, partnerships, S corporations, estates, trusts, and residual interests in REMICs.