Question

In: Accounting

Which of the following is an example of a cost that does NOTchange in total...

Which of the following is an example of a cost that does NOT change in total over wide ranges of volume or activity?


A)the company president's salary

B)cloth used to make shirts

C)hourly wages for production line workers

D)bottles used in a beverage company

Solutions

Expert Solution

Option : A

Company incures cost on production and service activities.

Cost are mainly categorised into two types this are fixed cost and variable cost. Variable cost are changed to the level of activity or volume and the fixed cost are never change to the level of activity or volume.

In the given question :

Clothes used to make shirts chaged to thier level of activity or volume. Cloths are material to the shirts making company.

Hourly wages for production line workers wages are changed to level of production or volume.

Bottels used by beverage company. In the change in the level of activity usage of bottels are also changes.

Salaries to employees and president are never change due to change in the level of activity. Salaries are fixed assets.


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