Which of the following is a fixed cost?
A)Direct materials cost
B)Direct labor cost
C)Straight-line depreciation expense
D)Sales commission expense

Question

Quizplus · Accepted Answer

A fixed cost is a cost that does not vary with changes in the level of output or sales. Straight-line depreciation expense is a fixed cost since it is a noncash expense and does not vary with changes in production levels or sales. Direct materials cost and direct labor cost are both variable costs since they increase with higher levels of production. Sales commission expense is a semi-variable cost, as it may have a fixed component (base salary) and a variable component (commission based on sales).

Which of the Following Is a Fixed Cost