Asked by
Lester Bondoc
on Nov 12, 2024
Verified
Rental charges of $40,000 per year plus $3 for each machine hour over 18,000 hours are an example of a fixed cost.
Rental Charges
Fees incurred for the use of property or equipment that is not owned, usually on a periodic basis such as monthly or yearly.
Machine Hour
A unit of measure representing one hour of operating time for a machine, used in allocating manufacturing costs.
Fixed Cost
Operating expenses that do not change in proportion to the level of production or sales activity, such as rent or salaries.
- Characterize and explicate variable, fixed, and mixed expenditures.
- Scrutinize the effect of fixed and variable expenditures on the financial processes within a business entity.
Verified Answer
MK
Learning Objectives
- Characterize and explicate variable, fixed, and mixed expenditures.
- Scrutinize the effect of fixed and variable expenditures on the financial processes within a business entity.