Which of the following is a fixed cost?
A)Payment to hire a security worker to guard the gate to the factory around the clock
B)Wages to hire assembly line workers
C)Payments to an electric utility
D)Costs of raw materials

Question

Quizplus · Accepted Answer

A fixed cost is a cost that does not vary with changes in the amount of goods or services produced or sold. Payment to hire a security worker is a fixed cost because it needs to be paid regardless of the level of production or sales. Wages to hire assembly line workers, payments to an electric utility, and costs of raw materials are variable costs because they increase or decrease with changes in production or sales.

Which of the Following Is a Fixed Cost