Fixed costs are costs that vary according to the number of units of product made or service sold. For example, with the production of Burger King cheeseburger meals, when sales and demand decrease, fewer raw goods such as cheeseburger ingredients, product packaging, and novelty items such as toys are required.

Question

Quizplus · Accepted Answer

Fixed costs are costs that do not vary with changes in the number of units produced or sold. Examples of fixed costs include rent, salaries, and insurance. Therefore, the statement in the question is incorrect as it describes variable costs instead of fixed costs.

Fixed Costs Are Costs That Vary According to the Number