Chapter 18: Cost-Volume-Profit and Business Scalability (Walther, L.M. (2012). Principles of Accounting. Logan, UT: Utah State University. Available at
For the Discussion Post:
The following are different categories of costs:
Fixed (committed),
Fixed (discretionary),
and Mixed
Identify what type of cost is best represented by the following examples of costs and in your own words briefly explain why.
The answer to the first one, Rent, is provided as an example: Rent is a fixed, committed cost because it does not change due to differences in activity levels. In other words, rent is always a cost that will be due regardless of business activity level. It is generally considered a committed cost because once you sign the lease you are committed to paying rent for the life of the lease.
Rent: Answer explained above
Property taxes on land and building
Billboard advertising campaign
Raw materials used in the manufacturing process
Employee picnic with a band, food, and door prizes
Be sure to use in-text citation and provide references for your sources, including textbooks.