Which one of these is most apt to be a fixed cost?
A) Raw materials
B) Manufacturing wages
C) Management bonuses
D) Office salaries
E) Shipping and freight

Question

Quizplus · Accepted Answer

Fixed costs are expenses that do not change in the short-term, regardless of the level of production or sales. Office salaries, such as salaries of administrative staff, are typically fixed costs as they are usually paid a set amount regardless of production or sales levels. Raw materials and shipping/freight costs are usually variable costs, as they change with the amount of production or sales. Manufacturing wages may be considered fixed or variable, depending on the payment structure, but they are more likely to be variable costs as they are usually tied to the number of goods produced. Management bonuses can also vary based on performance and are not typically considered fixed costs.

Which One of These Is Most Apt to Be a Fixed