Question

please provide formulas and answers

Discretionary and Committed Fixed Costs Identify and compute total discretionary fixed costs and total committed fixed costs from the following list prepared by the accounting supervisor for Kitts Building Supply 521,200 Advertising Depreciation Health insurance for the company's employees Management salaries Payment on long-term debi Property tax Grounds maintenance Office remodeling Research and development 49,700 24.000 91.000 39,500 31.750 7.800 23,500 47,300 2. Accan Annie

Answer 1

Discretionary costs are also called as Capital expenditure that can be avoided without any impact of profitability.

Discretionary Fixed costs are costs for a period specific costs which can be reduced without any effect of profit for that period.

Committed Fixed costs are costs that business cannot eliminate from budget.

Discretionary costs:
Grounds Maintenance	$7,800
Office remodeling	$23,500
Total	$31,300
Discretionary Fixed costs:
Advertising	$23,200
Research and Development	$47,300
Total	$70,500
Committed Fixed Costs:
Depreciation	$49,700
Health insurance for the company's employees	$24,000
Management Salaries	$91,000
Payment of long term debt	$39,500
Property tax	$31,750
Total	$235,950