Which of the following is an example of a discretionary cost? A) Salaries of management personnel B) Advertising expenses C) Property taxes D) Rent of facilities
Understand the Problem
The question is asking to identify which option represents a discretionary cost among the given choices. A discretionary cost is one that can be adjusted or eliminated without affecting the overall operation of a company.
Answer
Advertising expenses.
The final answer is Advertising expenses.
Answer for screen readers
The final answer is Advertising expenses.
More Information
Discretionary costs are those that can be altered in the short term without significantly impacting the organization's operations. Advertising expenses are often considered discretionary because a company can choose to spend more or less on advertising from year to year.
Tips
A common mistake is to confuse discretionary costs with committed costs. Committed costs, like rent or salaries for essential staff, are harder to change in the short term.
Sources
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