Which of the Following Would Not Typically Be Classified as a Discretionary

question 69

Multiple Choice

Which of the following would not typically be classified as a discretionary cost?

• A)Equipment depreciation.
• B)Management development programs.
• C)Advertising and promotion.
• D)Research and development costs.
• E)Contributions to charitable organizations.

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Definitions:

Differential Cost

The difference in total cost that will result from selecting one alternative over another.

Differential Analysis

The area of accounting concerned with the effect of alternative courses of action on revenues and costs.

Unprofitable Segment

A division or business unit within a company that does not generate profits and may incur losses.

Plant Assets

Long-term tangible assets that are used in the operations of a business and are not intended for resale, such as machinery, buildings, and land.