1 Advertising campaigns. 2 Employee training. 3 Investor relations. 4 Public relations.
Most expenditures will eventually have a negative impact on the competitiveness of a business if they are curtailed for a long period of time, so the reduction of a discretionary fixed cost should usually only be considered over a relatively short period to time, such as a few months to a year. Consequently, though these costs are classified as discretionary, they should only be reduced when it is absolutely necessary to do so. The following can be considered discretionary fixed costs: 1  Advertising campaigns. 2  Employee training. 3  Investor relations. 4  Public Some of the examples of fixed cost include rent, insurance, salaries and accountancy costs, forms of depreciation, capital assets, utilities, property tax, or interest expense. Another good example of fixed cost is a lease payment. The fixed costs are, therefore, fixed for a short time period. Definition. Fixed costs, in economics, are explained as business expenses which do not depend on the level of goods and services proffered by a business. In management accounting, fixed costs are defined as expenses that do not change as a function of the activity of a business, within the relevant period. For example, a retailer must pay rent and utility bills irrespective of sales. In marketing, it is necessary to know how costs divide between variable and fixed. Along with variable costs, fixed costs make up one of the two components of total cost: total cost is equal to fixed costs plus variable costs. In economics, fixed costs, indirect costs or overheads are business expenses that are not dependent on the level of goods or services produced by the business. A discretionary cost is a cost or capital expenditure that can be curtailed or even eliminated in the short term without having an immediate impact on the short-term profitability of a business. Thus, discretionary costs are actually only discretionary in the short-term, not the long-term. Examples of discretionary costs are: 1  Advertising. 2  Building maintenance. 3  Contributions. 4  Employee training. A discretionary fixed cost is an expenditure for a period-specific cost or a fixed asset, which can be eliminated or reduced without having an immediate impact on the reported profitability of a business. Consequently, though these costs are classified as discretionary, they should only be reduced when it is absolutely necessary to do so. The following can be considered discretionary fixed costs: 1  Advertising campaigns. 2  Employee training. 3  Investor relations. 4  Public 1. Definition of discretionary costs. Discretionary costs are expenses that are important for the business but are subject to management s judgment (discretion). Discretionary costs are essentially voluntary cost s incurred by an entity to meet customer expectations or create goodwill. Discretionary costs are opposite to committed costs i.e., expenses that an entity must incur to operate. Usually discretionary costs represent funding for a specific activity (or project) for a specified period of time. Companies incur fixed costs -- also known as overhead expenses -- for doing business. The two types of fixed costs are discretionary and committed. Small and large businesses have some flexibility with discretionary costs, such as marketing and travel.  Discretionary Fixed Cost Definition : Discretionary fixed costs are those fixed costs that arise from annual decisions by management to spend in certain fixed cost areas, for example advertising and research.  DEFINITION of 'Discretionary Expense'. A discretionary expense is a cost which is not essential for the operation of a home or a business. For example, a business may allow employees to charge certain meal and entertainment costs to the company in order to promote goodwill with employees A discretionary fixed cost varies from a committed fixed cost, in that a committed cost obligates a business to continue making payments over a certain period of time (such as the lease on an office building). Similar Terms. A discretionary fixed cost is also known as a managed fixed cost. Consequently, though these costs are classified as discretionary, they should only be reduced when it is absolutely necessary to do so. The following can be considered discretionary fixed costs: 1  Advertising campaigns. 2  Employee training. 3  Investor relations. 4  Public
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what is an example of discretionary fixed cost