Which of the following would be an example of a fixed cost for a company that makes carbon monoxide monitoring systems for employees to wear that work in hazardous areas?
A)the lithium batteries that are used in each monitor
B)the chest harness which the employee must use to wear the monitor
C)the rent for the company's offices
D)the free training videos that are sent to each new customer

Question

Quizplus · Accepted Answer

Rent for the company's offices is a fixed cost because it remains constant regardless of the number of carbon monoxide monitoring systems produced or sold. The cost of lithium batteries (A) and the chest harness (B) would be considered variable costs because they would increase or decrease based on the number of monitors produced. The free training videos (D) would be considered a marketing expense and not a fixed cost.

Which of the Following Would Be an Example of a Fixed