Fixed overhead costs include ________.
A) the cost of sales commissions
B) Leasing of machinery used in a factory
C) energy costs
D) indirect materials

Question

Quizplus · Accepted Answer

Fixed overhead costs are the costs that do not change with changes in the volume of production, and they typically include expenses such as rent, depreciation, property taxes, insurance, and lease payments for machinery and equipment used in production. Therefore, the correct choice is B as it mentions leasing of machinery which is a fixed overhead cost.

Choices A, C, and D are not correct as they can be considered as variable overhead costs, such as the cost of sales commissions and indirect materials, or period expenses, such as energy costs.

Fixed Overhead Costs Include ________