Question

For Frank’s Funky Sounds, straight-line depreciation on the trucks is a

a. variable cost.
b. fixed cost.
c. mixed cost.
d. high-low cost.

Answer 1

The answer is Fixed costs. The straight-line depreciation on the trucks is considered to be a fixed-cost, since the trucks have a constant cost, no matter how large or small the quantity of products produced by the business, which is why it is considered to be fixed-costs.