Select the Appropriate Classification of Each of the Costs Listed

question 52

Multiple Choice

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all.
-Cost of an existing lease

• A)Discretionary fixed cost
• B)Committed fixed cost

---

Definitions:

Economic Profits

Profits exceeding the total costs of inputs including opportunity costs, typically representing gains beyond the normal profit levels.

Economic Losses

Financial deficits incurred by businesses or individuals, often resulting from poor investment decisions or market downturns.

Profit-Seeking

The motivation or driving force behind individuals or companies to undertake activities that increase earnings and reduce costs, in order to maximize profits.

Major Oil Companies

Large, often multinational companies, engaged in the exploration, extraction, refining, and selling of oil and petroleum products.