Question

Higado Confectionery Corporation has a number of store locations throughout North America. In income statements segmented by store, which of the following would be considered a common fixed cost with respect to the stores?a.store manager salaries 。b.store building depreciation expense c. the cost of corporate advertising aired during the Super Bowl d.cost of goods sold at each store

Answer 1

Answer:

c. the cost of corporate advertising aired during the Super Bowl.

Explanation:

Financial statements show the financial position of a business for a given period, and the income statement compares revenue and expenses to get profitability of a business at a particular time.

Higado Confectionery Corporation has a number of store locations throughout North America. Since there is segmented income statement per store items like store manager salaries, store building depreciation expense and cost of goods sold at each store will appear in individual statements.

However when there is a corporate advertisement at the Superbowl all of the stores jointly benefit, so there will be a representation of this cost on all their income statements.