Which one of these is both a product cost and a fixed cost in the short run?
A)Monthly electric bill for manufacturing facility
B)Salary for company CEO
C)Overtime pay for production employees
D)Sales commission paid based on monthly sales
E)Monthly lease payment for production equipment

Question

Quizplus · Accepted Answer

Monthly lease payment for production equipment is a product cost because it is directly related to the production of goods. It is also a fixed cost in the short run because the lease payment remains the same regardless of the level of production. The other options either relate to company management or vary with the level of production, making them either not a product cost or not a fixed cost in the short run.

Which One of These Is Both a Product Cost and a Fixed