An Example of a Fixed Cost for a Manufacturer Would

question 169

Multiple Choice

An example of a fixed cost for a manufacturer would be which of the following?

• A)Sales commissions
• B)Salary of plant manager
• C)Direct materials
• D)Delivery costs

---

Definitions:

Cost-Plus Approach

A pricing strategy where the selling price is determined by adding a specific markup to a product's cost to ensure profitability.

Markup Percentage

A measure of the difference between the cost of a product and its selling price, expressed as a percentage of the cost.

Markup Percentage

The ratio between the cost of a good or service and its selling price, expressed as a percentage over the cost.

Total Cost Method

A method of inventory valuation where the total cost of goods available for sale is allocated to the cost of goods sold and ending inventory.