Cromwell Furniture Company manufactures sofas for distribution to several major retail chains. It has incurred costs in 'purchase of janitorial supplies, $2,500 per month' for the production and sale of sofas. Classify the cost as either fixed, variable or mixed. Justify your answer.
Janitorial supplies are the things which are used in cleaning a particular place. Examples of janitorial supplies are broomsticks, mop, vacuum cleaner, wipers, dustpan, dustbins, brushes, protective gloves, etc.
Answer and Explanation: 1
Cost incurred on purchasing of janitorial supplies, for $2500 per month for the production and sales of sofas is FIxed cost. The cost will be same...
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fromChapter 3 / Lesson 14
What is a fixed cost? Learn the fixed cost definition and how to calculate it using the fixed cost formula. Compare fixed vs. variable costs and see fixed costs examples in business.