Jeremy Rhodes leases a manufacturing facility that produces computer keyboards. Jeremy tries to keep production high, because his lease payments are $6,200 a month, regardless of whether he produces one computer keyboard a month or 10,000. Jeremy's lease payment is a:
A) variable cost
B) secondary cost
C) fixed cost
D) marginal cost
E) tangible cost

Question

Quizplus · Accepted Answer

Fixed costs are expenses that do not vary with changes in the volume of goods or services produced. In this case, Jeremy's lease payment is a fixed cost because it remains constant regardless of production levels.

Jeremy Rhodes Leases a Manufacturing Facility That Produces Computer Keyboards