Which of the following would be considered a fixed cost in a manufacturing setting?
A) Depreciation
B) Direct labor
C) Sales commissions
D) Direct materials

Question

Quizplus · Accepted Answer

Depreciation is a fixed cost because it is a non-cash expense that is spread out over the life of an asset, such as machinery or equipment. Direct labor, sales commissions, and direct materials are all variable costs that fluctuate with changes in production levels.

Which of the Following Would Be Considered a Fixed Cost