The Costs Incurred That Provide Long-Term Activity Capacity, Usually as the Result

question 67

Multiple Choice

The costs incurred that provide long-term activity capacity, usually as the result of strategic planning are called:

• A) Discretionary fixed expenses
• B) Committed fixed expenses
• C) Mixed costs
• D) Step-variable costs

---

Definitions:

Land

A fixed asset representing the ownership of physical real estate or ground, not depreciated over time in accounting practices.

Machinery and Equipment

These are tangible assets used in the operations of a business, often involved in the manufacturing, production, or service delivery processes.

Land Improvements

Enhancements made to a parcel of land to increase its value or usability, such as landscaping, fencing, and installation of utilities, which are usually depreciable over their useful life.

Buildings

Structures erected to serve as premises for business, residential, or other purposes, considered as fixed assets on a balance sheet.