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If advertising expense is fixed and has no concern with level of sales then it Is fixed but if it is changed with the change in level of sales then It is variable cost.
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Is advertising a fixed cost expense?
Yes. Variable costs are those that respond directly and proportionately to changes in activity level or volume, such as raw materials, hourly wages and commissions, utilities, inventory, office supplies, and packaging, mailing, and shipping costs. Since advertising does not, it is fixed. Some fixed costs are at the discretion of management, meaning business will not stop if you do not incur these costs (though it may suffer). Such costs include advertising. Other fixed costs are not avoidable, such as electricity.
What is on overhead?
Overhead refers to the cost of a business in a particular period. Specifically, overhead points to fixed and indirect costs. They are non-labor costs. Non-labor costs are variable or fixed. Rent and salaries are examples of fixed costs. Advertising and supplies are variable costs.
What do fixed selling costs include?
The total cost of marketing, advertising, and selling a product.
What is co-op advertising?
A situation in advertising where a retailer and manufacturer agree to the reimbursement of advertising costs. These costs may be in whole or a percentage. Typically it is the manufacturer who reimburses the retailer for the costs of advertising.
What does fixed costs means?
what does fixed costs mean
Why are Fixed costs also called capacity costs?
Fixed costs are considered capacity costs because if a company expands, fixed costs will change. Additionally, if a company adds more resources, fixed costs will change.
Variable costs are relevant and fixed costs are irrelevant?
Generally variable costs are relevant costs but if due to any decision fixed costs are also going to affected then fixed costs are also relevant costs.
What factors should be considered when small business owners decides to advertise?
The advertising medium. The advertising costs. The projected ROI. The opportunity costs. Does the advertising support the company's marketing plan and strategies?
Is advertising cost fixed or variable?
Advertising is a fixed cost. Many business allocate money to each quarter to cover their advertising cost for their company.
Is fixed costs is a period costs?
Yes normally fixed costs are period costs because these costs have to be paid no matter production done or not.
What happens to sales when fixed costs decrease?
When fixed costs decrease, what does this do for sales?
Fixed costs are those costs which are?
Fixed costs are assigned to all products. Variable costs are assigned only to the product that led to the cost.
