Which of the Following Would Be Classified as Committed Short-Term

question 50

Multiple Choice

Which of the following would be classified as committed short-term resources?

• A)salaried employees
• B)depreciation on building
• C)fuel to generate electricity internally
• D)lease on machinery

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Definitions:

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance.

Profit

The financial gain made in a transaction or business operation, calculated as the excess of revenue over expenses.

Unit Variable Costs

The costs associated with producing one unit of a product or service, which vary directly with the volume of production.

Fixed Costs

Fixed charges that are unaffected by the volume of output or the quantity sold, including rental fees and payrolls.