For a construction company that builds houses, which of the following costs would be a fixed cost?
A)the $20 per hour wage paid to a construction foreman
B)the $30,000 per year salary paid to the company's bookkeeper
C)the $2 per worker-hour paid to the state government for workers' compensation insurance
D)All of the above are correct.

Question

Quizplus · Accepted Answer

A fixed cost is a cost that does not change with the level of production or sales. The wage paid to a construction foreman (choice A) and the fee paid to the state government for workers' compensation insurance (choice C) are both variable costs that would increase with more hours worked or more workers employed. The salary paid to the company's bookkeeper (choice B) is a fixed cost because it does not change with the level of production or sales.

For a Construction Company That Builds Houses, Which of the Following