For frank’s funky sounds. straight-line depreciation on the trucks is a

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For Franks Funky Sounds, straight-line depreciation on the trucks is a O A. fixed cost O B. variable cost O C. high-low cost

Answer

A) Fixed cost is the correct alternative.

Explanation : Formula for annual Depreciation expense under
straight line method = [ Cost of the asset + Installation charges –
Scrap value ] / Number of years of working life. It is always
remain fixed and never altered with the changes in the number of
units produced or sold. So, it is a fixed cost in nature .

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Why the other alternatives are not true :

B) Variable cost changes when there is an changes in the units
of production or sales. But depreciation expense under straight
line method never altered.

C) High low cost is only exists when in a total cost pool, both
variable and fixed cost components are available. But depreciation
expense is a fixed cost.

D) Mixed cost means semi variable cost. Where the the expenses
contains fixed and variable cost components. As we know
depreciation expense is a pure fixed cost which never depends on
number of units produced or sold, thus it is not a mixed cost .

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