Question

Lucky Pizza used flyers to promote its pizzas every week. Last week it mailed 200,000 copies of flyers out to neighbor communities, at a total cost of $4,000. How should the marketing manager of the pizzeria treat the cost of flyers? Group of answer choicesa. It is fixed cost.

b. It is variable cost.

c. It could be fixed cost or variable cost depending on the type of the product.

d. It is total $C.

e. All the other 4 answers are correct.

Answer 1

It is a fixed cost

Step-by-step explanation:

In simple words,, fixed costs refers to the corporation expenses which are not contingent on the amount of the market generated products or services. They appear to be correlated with time, such as taxes or rentals charged every month, and are also referenced to here as overhead expenses.

Thus, from the above we can conclude that the flyer cost is a fixed expense as it has to be done every week and is necessary for operations also it has to be done for all the neighboring communities.

Answer 2

Option "A" is the correct answer of the following question.

Step-by-step explanation:

In the given scenario flyers are used to promote the sale of pizzas but not a part of the variable cost of pizzas, the cost of copies of flyers is a type of fixed advertisement expense.

Given:

Number of flyers = 200,000

Total cost of flyers = $4,000

$4,000 will be included in fixed costs.

So, option "A" is correct.