Which of the following is a fixed cost?
A) insurance
B) direct material
C) direct labor
D) freight costs on products

Question

Quizplus · Accepted Answer

Insurance is a fixed cost because it does not vary based on the level of production or sales. It is a set expense that the company incurs regardless of the amount of output.

The other options (B, C, and D) are variable costs because they change with the level of production or sales. Direct material and direct labor costs increase as more products are produced, and freight costs increase as more products are shipped.

Which of the Following Is a Fixed Cost