Which of the Following Is a Fixed Cost

question 264

Multiple Choice

Which of the following is a fixed cost?

• A)Direct materials cost
• B)Direct labor cost
• C)Sales commissions expense
• D)Straight-line depreciation expense

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Definitions:

Acquisition Cost

The total cost incurred to acquire an asset, including the purchase price and any associated costs such as installation and transportation.

Goodwill

Goodwill is an intangible asset that arises when a company acquires another for a price higher than the fair value of its net identifiable assets, representing factors like brand reputation or customer relationships.

Identifiable Net Assets

The portion of a company's net assets that can be attributed to specific assets and liabilities, excluding goodwill.

Amortization Period

The length of time over which a company gradually writes off the initial cost of an intangible asset.