Which of the Following Would Be Classified as a Fixed

question 46

Multiple Choice

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

• A)the rent from the six-year lease on the building where the store is located
• B)the cost of the boxes of cereal sold in the supermarket
• C)the salary paid to the store's manager
• D)the overtime paid to the store's manager
• E)the Canada Pension payments that the supermarket makes to the government on the workers' income

---

Definitions:

Double-Declining-Balance Method

A method of depreciation that provides periodic depreciation expense based on the declining book value of a fixed asset over its estimated life.

Residual Value

The remaining value of an asset after accounting for depreciation and usage over time.

Depreciation

A systematic reduction in the recorded value of a fixed asset, recognizing wear and tear over time.

Estimated Life

The expected period over which an asset is useful to the owning entity, affecting calculations like depreciation.